Selling your Home:
Full-Service vs. Discount Brokers

You've decided to enlist the help of a real estate professional in selling your home.  Will you use a full-service or discount broker?  Both are viable options for home sellers.  However, it is important to understand and differentiate between the service model types to choose the one that is most appropriate for your needs.

Full-Service Brokers
Traditional full-service real estate brokers include recognizable brand names such as Coldwell Banker, RE/MAX, and Keller Williams.  These brokers typically charge a higher commission rate than discounters -- historically 6 percent; and they rarely, if ever, charge any additional fees.  Under the full-service model, all costs associated with marketing your home are covered.  This usually includes activities such as promotion, advertising, direct mail, and posting information about your home in the Multiple Listing Service (MLS).  Also with this model, brokers normally employ personalized marketing plans that are designed to gain maximum exposure for individual homes they have listed for sale.

Discount Brokers
Discount brokers offer a reduced commission.  You could see commission percentages ranging anywhere from 3 percent to 4.5 percent.  Depending on the particular broker you use, you may get a bundle of services comparable to that of the traditional broker, or you could get a scaled-down package with fees for additional services.  You will commonly find that marketing dollars are primarily directed toward attracting interested prospects to a central web site, magazine, or other marketing medium where groups of homes offered by that broker are featured.

Although unbundled, or fee-for-service, real estate services are not technically viewed as falling into the discount broker category, many consumers consider these brokers to be discounters by virtue of their lower cost.  In this model, brokers offer home sellers a menu of services to choose from.  Sellers therefore only pay for services purchased.

Both Approaches Work
Both approaches can be successful for home sellers, but keep in mind that there are other considerations in addition to "money saved" when you make your choice.  For instance, look at the type of real estate market your area is experiencing.  If you are in a hot sellers' market where buyers are plentiful, you might decide that you don't need a traditional full-service package.  On the other hand, if buyers are not exactly lining up to purchase properties, the difference in individual marketing and other supplementary services provided by full-service brokers might make a difference in getting your home sold.  In addition, consider the type of property you are selling.  Does your home stand out among from the crowd, or is it in competition with many similar types of homes on the market?  Also, think about your desired timeline for closing the sale, your knowledge and comfort level with the process, and the amount of time you have to devote to taking on aspects associated with selling your home.  If speed, knowledge, and available time are concerns, you may need all of the services provided by the more traditional brokerages.

No matter which broker you end up working with, you should approach your selection process with due diligence.  Get referrals from people you know and trust.  Ask key questions.  And weigh the pros and cons before you choose.

Information is for educational and informational purposes only and is not be interpreted as financial or legal advice. This does not represent a recommendation to buy, sell, or hold any security. Please consult your financial advisor.