Real Estate Forums

ccubed · 12-30-2005, 05:26 PM

From what I understand there are new discount brokers willing to help buyers for a fee or percentage of the commission paid. The reason there is a market for this is because many people like myself who do all the leg work via the internet are not willing to hand over a negotiating tool to someone who basically is completing administrative type tasks. In comparison to the work I do and the pay I receive and compare that to a 3 % commission on a sale of a $500,000 house generating $15,000 to the buyer broker alone it just does not make sense anymore. For example, if I approach a friend who is a broker to assist me with a house I am ready to buy and all the broker needs to do is use his/her skills in assisting me in the negotiation utilizing maybe 2 hours a day for 3 days I certainly do not support paying this person $15,000 when I can obtain an attorney to assist for less than $1000 and achieve the same outcome and yet have more power to negotiate. At this point I already know what price I am willing to pay. Unfortunately there is really no more hidden secretive information anymore that is kept from the consumer/buyer, With a little resourcefulness any consumer can compile a list of comparative priced homes. That being said if I were a broker in the real estate market I would see this as an opportunity to be the first to start a company to fulfill this new need and not “miss the boat” by calling buyers greedy. It is not greedy it is economics and based on supply and demand. Those that do not conform will be left behind.

LVH · 12-30-2005, 06:10 PM

Discount brokers can not produce the number of buyers a full service brokerage can. Other than that you also when using a discount broker get buyers who feel since the seller is not paying full commissions that this is a time they should offer less for the sellers property since he/she is not paying those extra funds. Another issue is when this happens it drives the price of homes down in a neighborhood, I would venture to guess it might happen once but the next time that discount broker came to the neighborhood most sellers would reject their clients offers.

Just to throw some stats at you most consumers who use discount brokers for listing their homes usually end up within 90 days either asking to get out of their contract or if the contract has expired listing with a full service brokerage. With the legislation purposing new regulations of mimium services require in many states discount brokers are going to find it hard to stay in business and its not because they are bad people it is because they can not perform the same services financially as full services real estate companies so they will not be able to conform to the new state regulations because of monetary issues.

There is a time and a place for discounted fees but those are rare cases, but to suggest that discount brokerages are going to take over the real estate market is just CRAZY if we all dont conform..when you compare complaints per capita of discount brokerages to full service real estate companies complaints against discount brokers outnumber those of full service real estate agencies per capita 12 to 1

San Diego Real Estate · 12-31-2005, 08:22 AM

LVH...I totally agree!

The Discount Brokerage Concept is nothing new! They have been trying to make a major impact in the market for years and have yet to succeed!

We are involved in a transaction right now that our buyer is in the process of selling his house FSBO and boy does he now realize how big of a mistake that was...Not only may he end up loosing his New Dream Home but if he wasn't guided properly he could have lost all of his Earnest Money almost 10K!

Believe me he will always a full service Brokerage in the future!

You pay for what you get!

Portland Real Estate · 01-08-2006, 08:34 PM

Couldn't have agreed more. Pay peanuts, get monkeys. As simple as that. I wish there were some way that these FSBOs can have access to all the horrible facts and risks that they will have to face when going solo.

G550 · 02-10-2006, 07:33 AM

I was asked by a surgeon if I could rebate half of my commission back to him. I looked at him and replied... "I'd be happy to....if you give me a 50% discount on a surgical procedure". He said, "I don't discount my services". I replied. "neither do I".

Jade456 · 02-11-2006, 06:23 PM

Quote:

Originally Posted by G550

I was asked by a surgeon if I could rebate half of my commission back to him. I looked at him and replied... "I'd be happy to....if you give me a 50% discount on a surgical procedure". He said, "I don't discount my services". I replied. "neither do I".

Its funny how many people are trying to get into a realtor's pocket. I just read another vitrolic post by skeptic. The truth of the matter is if selling real estate were easy and made everyone who did it rich, everyone would do it (and not spend 8 years in college).