Selling Your Home – from Full Service to Discount Brokers or FSBO
Getting ready to put your home on the market? Choosing a real estate company and agent can be a daunting task. Do you use a Full Service Broker, A Discount Broker or maybe you go ‘For Sale By Owner’ (FSBO). Here you will find a breakdown on some of the options available to consumers when it comes time to put your home on the market. In the past few years a wide range of business models have emerged giving the consumer greater control over the process and their wallets.
I feel it’s only right to warn you that the author is a Real Estate Broker who owns their own company who provides Full Service, Discounted Service and Resources for the ‘For Sale By Owner’. Contrary to what many industry professionals may believe is that there is always room for change and improvement. The range of different business models that are now available to consumers is far reaching and ensures the consumers have choices when it comes to the selling of real property. Many of these business models we are seeing today may not be here tomorrow but the ones that appeal to the public will be successful and will be there for the long haul.
Here is a quick break down of the main types:
Full Service –
This is the traditional type of brokerage, generally charging a commission of the sales price which gets split between the Listing Broker and Selling Broker. This business model will never disappear as there will always be a consumer base for this type of service. Commissions vary throughout the country and could be as low as four percent (4%) or go as high as ten percent (10%). The contract that is most commonly used is the “Exclusive Right To Sell”, be careful here as many brokers will right a listing for lets say 6% where the commission would be split, but what happens if the buyer isn’t represented by a broker? The Listing Broker still gets the full 6%. As with all contracts it’s important to spell everything out in clear language so there will be no misunderstandings.
Discounted or Limited Service –
This is the new kids on the block and there is a wide range of different business models in this group. The primary concept here is a menu of services where the consumer can pick and choose what services they want and just pay for those services. These may come in an hourly price structure, flat fees, or reduced commission depending on the services being provided. In the majority of these business models they are all providing limited service and it’s important for the consumer to understand what it is they are getting for their money. As with the Full Service Broker understanding the contract is paramount.