Recently, a Seller client of mine had a decision to make. He had to decide whether he should hire me or a competing agent. The competing agent was offering limited services at a reduced fee. A much reduced fee. I did not tell my Seller client that you get what you pay for. I did not disparage the agent or his business model. It would be against my personal code of ethics to do so. It’s also against the National Association of Realtor’s Code of Ethics.
Full Service or Limited Service Brokerage?
Instead, I explained to the Seller that within the industry, there are various business models to choose from. There is nothing inherently wrong with a limited-service broker. There is nothing inherently right with a full-service broker. They are simply different models. Typically, discount brokers focus on saving their clients fees. They may charge a flat fee or a smaller percentage than a full-service broker. Fees can also be scaled, based on services provided. In order to make money, a limited service broker focuses on volume. The more listings, the more money they make. Again, there is nothing wrong with the model. It is what it is. It is based on numbers and the value proposition for Sellers is savings.
Savings vs. Earnings
It’s important to understand the dichotomy between savings and earnings. A focus on savings entails cutting fees to increase profit margin. It’s simple. And, it’s understandable. But, the price of real estate is not determined until the property is on the market. And, the best way to maximize a property’s value is through strategic marketing. Smart marketing. Skilled negotiations.
A full-service broker may cost more, but that doesn’t necessarily mean you net less. A full-service broker employing effective strategies can help you sell your home at the highest price. At the best terms. And, in the shortest period of time, thus saving you time and money. Ultimately, my client decided to list with a full-service broker. Me. Yes, he wanted to save money. Who doesn’t? But, he wanted full-service representation more. I can’t promise that he’ll net more, though I strongly believe he will. What I can absolutely promise is a focus on strategic marketing and full market exposure. I can promise smart marketing and solid representation. And, I can promise that his “savings” will come by way of smooth and timely transaction.