Discount Real Estate Broker vs. Traditional Broker
More than 90% of all homes in Utah are sold using the Realtor's Multiple Listing Service or MLS. This is because when you list your home on the MLS, you now have potentially hundreds of agents trying to sell your home. To get your home listed on the MLS, you have to hire a Realtor who is a member of your local MLS. You can either hire a traditional Realtor and pay them 6% of your purchase price, or you can hire a discount or flat fee realtor and pay a low flat fee no matter what your selling price. Utah Home Central is a hybrid of the two. Let us explain.
Traditional 6% Service
A traditional 6% agency normally has agents that offer a full-service listing, and offers all the tools and expertise to sell your home quickly and for top dollar. The downside is you pay a full 6% commission, which is a lot of money.
When your house sells, your Realtor will normally offer 3%, or half the commission you are paying them and offer it to any cooperating agency that brings you a buyer. If a buyer comes along who doesn't have an agent, the listing agency will then take the whole 6%, because that's what you agreed to pay them. They almost always offer the buyer's realtor 3% and your Realtor takes the difference, but not always. That's where you need to be careful if you hire a traditional realtor. If he or she does not offer the buyer's Realtor at least 2.5% -3% (especially in a buyer's market), your chances of selling your house just dropped dramatically. Always demand they offer at least 2.5% - 3% unless of course, you're not willing to pay them that much.
Most traditional Realtors will help you price your home. They will take and manage all the appointments. They will list your house on the MLS and put a sign in your yard. They will advertise your home on the internet. Some still advertise in a newspaper or a magazine, but these types of advertising are no longer very effective since most everyone uses the internet to search for homes these days. Most importantly, they will help you with all the contracts and help negotiate terms that are in your best interest. These are the normal services that all traditional 6% realtor offers.
Discount Real Estate Brokers
Typical discount real estate brokers are NOT full service. They offer to put your house on the market for a small flat fee, normally around $200 - $500. Other than that, you are on your own. Be careful if they tell you they are full service, because, at that price, it's almost impossible to be full service. To learn more about why, read our page on The Five Critical Mistakes Homeowners Make That Costs Them Thousands of Dollars. It goes into more detail about why this is so.
Because the listing agent is charging so little for the listing, be prepared to take your own photos, price your own home, manage your own appointments, perform your own follow-up, negotiate your own deals, fill out your own contracts, etc. Also, it's important to remember you are only saving the listing commission, you will still need to pay a buyer's agent a commission; this is the case no matter what agency you use.
Because you don't get the same care and expertise from most discount brokers vs. traditional 6% agencies, your chances of successfully selling your house significantly diminish and can be a very frustrating experience, and if you're not careful, you may just end up netting less out of the deal than had you hired a full-service agency. To learn more about this, watch our video on the dangers of using a limited-service agency.
Utah Home Central - Hybrid Service
Utah Home Central offers a hybrid of these two types of services. We offer all the same services as a traditional 6% real estate brokerage, but we do it for a flat fee. This way, whether you are experienced or inexperienced, you can feel confident selling your home and still save a very large commission.
Many discount brokerages charge a very low fee. The only way they can stay in business is by listing as many homes as possible. Because they list such large volumes of homes, they hardly have the manpower to give any one of their listings much attention.
To ensure Utah Home Central can give its customers the care and expertise needed to sell their home, but still save them money over traditional 6% real estate firms, Utah Home Central has created a flat fee pricing structure that allows them to still make a living, but not get so overwhelmed they can't take care of their customers. This way we can still offer our customers excellent service and still save them thousands of dollars at the same time. Click here to review our pricing.
Why You Should Use a Discount Broker Like Utah Home Central
This is crazy. A client called me to list his deceased parent's home. We signed all the listing documents and had the photos taken and we were just about to list the home when a neighbor called and said he was interested in buying it.
I showed the neighbor the home and he said he would buy it and pay cash. I helped him with the contracts, but that's about it. A couple of weeks later we closed on the home.
Now, our contract doesn't require the owner to pay the buyer's agent fee if there isn't a buyer's agent involved, but most agencies do, because that was the fee they agreed to pay.
Now if I add up all the hours I worked on this deal, it would come to around 10 hours. In this case, my client ended up paying me $3,100 and that was it because there wasn't a buyer's agent.
However, had he gone with a traditional 6% agency, he would have paid $48,000 in commissions. By going with Utah Home Central, this client saved around $45,000. If you're looking to sell, give us a call.