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featured image - All You Need to Know About Low Commission Real Estate Agents
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All You Need to Know About Low Commission Real Estate Agents

  • Perla Irish
  • May 18, 2022
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Table of Contents Show
  1. Table of Contents
  2. 1. How Do Low Commission Estate Agents Work?
  3. 2. Types of Low Commission Real Estate Agents
    1. A. Flat Fee MLS brokers
    2. B. Hybrid Model
    3. C. Full-Service Agent with Commission Discount
  4. 3. Advantages of Hiring a Low Commission Real Estate Agent
  5. 4. Things to Test Out Before Hiring a Low Commission Real Estate Agent
  6. 5. Top Low Commission Real Estate Agents to Work With
    1. a. Houzeo
    2. b. RedFin
    3. c. Trelora
    4. d. Houwzer
  7. 6. Conclusion

The real estate market is booming in the United States and there are no signs of it slowing down. With this, there is a hike in the real estate agent commission.

The good news to the sellers, new and hybrid models are trending in real estate currently and so they can take choose a different option than a traditional full-service real estate agent and save a few thousand dollars.

image - All You Need to Know About Low Commission Real Estate Agents
All You Need to Know About Low Commission Real Estate Agents

One of the accepted options is hiring low-commission real estate agents. With an increase in competition, many agents offer this service to sellers at a low commission rate. Here is all you need to know about low commission real estate agents.

Table of Contents

1: How do low commission estate agents function?

2: Types of low commission real estate agents

3: Advantages of hiring a low commission real estate agent

4: Things to test out before hiring a low commission real estate agent

5: Top low commission real estate agents to work with

6: Conclusion

1. How Do Low Commission Estate Agents Work?

The traditional full-service agents charge approximately a 6 percent charge on the sale of a property, as a part of the listing and buyer commission.

Sellers end up paying steep prices to the agents and therefore there is an option of low commission real estate agents which sellers can avail themselves of.

A low commission real estate agent can charge around 3-4 percent, and not the usual 6 percent. Therefore, it is therefore important to ensure that you are satisfied with the services provided.

Since they are working on slashed rates, it is possible that they only provide a part of the services that they would otherwise do as a full-service agent. But oftentimes, hiring a low commission could be profitable to a seller. Here’s how.

2. Types of Low Commission Real Estate Agents

Even though low commission real estate agents simply mean agents who work on discounts, there are many options in this category that sellers can choose from.

A. Flat Fee MLS brokers

This is a For Sale By Owner (FSBO) option which only provides the owner with an MLS listing for a pre-decided flat fee. Everything else, including the complicated documentation, marketing, photography, price staging, handling showings, and even doing the closing discussions all by themselves.

Except for the MLS listing, the seller has to take care of everything. This works well for sellers who are experienced in navigating through this complicated process on their own. But for most sellers, it gets cumbersome.

For FSBO then the best option is going for Houzeo which provides all other services, according to a flat fee package chosen by the seller, in addition to the MLS listing.

With Houzeo, you get all the fundamental assistance, technological support, and resultant easy navigation through the real estate red tape in the country.


Read Also:

  • Choosing an Agent: 3 Helpful Tips to Choosing Your Real Estate Agent
  • Five Questions You Should Ask Before Hiring a Real Estate Agent
  • What Makes a Good Real Estate Agent? 5 Must-Have Qualities
  • Tips to Find a Reliable Real Estate Agent

B. Hybrid Model

This is a dynamic model which allows you to pick and choose according to what you deem essential. IN the hybrid model, the seller pays for the services he avails of from the real estate agents.

Flat fees and then the charges are added, for the extra services taken. Also, there are modifications made to the agent commission depending on the type of property, urgency of the sale, and market conditions.

With the hybrid model, certain elements of having a traditional full-service real estate agent are retained like management of open houses and marketing. Sellers can opt for a package and do everything excluding the same, on their own.

C. Full-Service Agent with Commission Discount

As the name suggests, this phenomenon occurs when the traditional full-service agent provides services at a discounted rate.

They act like discount real estate brokers, Variety of agents offer discounts in varying degrees and seller needs to be very cautious in choosing a discount real estate broker, considering if they are valued for money.

3. Advantages of Hiring a Low Commission Real Estate Agent

One of the biggest advantages of taking on a low commission real estate agent is that their qualifications are on par with the traditional real estate agent.

They have to be a licensed member of the National Association of Realtors®. Rest assured, they are exactly like traditional agents, and the only difference is that they charge low.

It is also observed that they also rely on technology and hence sellers are benefited from their user-friendly interface, digitization of documentation, and control over the sale.

4. Things to Test Out Before Hiring a Low Commission Real Estate Agent

The prospect of hiring a low commission real estate is tempting but one has to be wary of many things before signing up for this. There is a perception, not entirely untrue, that low commission real estate agents are low in service.

Also, they tend to take up many clients at a time and so they are not able to give their full attention to a seller at a time.

There is a risk that a low commission real estate agent can be a dual agent. Discount real estate brokers sometimes charge as low as 1 percent from the seller as commission and also represent the buyer.

They are liable for a full commission from that end. Hence, the total rate that the seller has to pay in addition to the agreed 1 percent is 2.5-3 percent buyer commission.

This system is not legal in the 6 states of The United States of America because with this, the interests of both parties could be compromised.

Sometimes, low commission agents lack the network and marketing know-how of traditional full-service agents. Therefore, the house might sell for less or it may take a long time for it to sell.

Considering all this, it is prudent for a seller to go for a Flat Fee MLS service like Houzeo to save a few thousand dollars as well as make a profitable deal.

5. Top Low Commission Real Estate Agents to Work With

a. Houzeo

Houzeo charges a $329 flat fee for an MLS listing and provides a bouquet of a-la-cart services as per the package taken by the seller. Sellers end up saving thousands with this.

Also, seller risk is minimized with no hidden charges and transparency in the dealings along with the backup of advanced technology. You can check out Houzeo reviews for more information.

b. RedFin

Redfin charges a 1.5 percent commission and therefore the sellers end up saving about 30 percent on the sale. The issue here is that this service is not custom-made but their technological know-how can help sellers crack a good deal.

c. Trelora

Trelora offers a full-service package at 1 percent and 2 percent. Even though the services are full, a handful of real estate agents are commissioned to work with a considerably large client base. This is tricky because the quality of service suffers.

d. Houwzer

Houwzer charges a $5000 flat fee to sellers and provides services like a traditional real estate agent but at a low commission rate. Paying $5000 is cumbersome if the properties are valued at less than $1 million.

6. Conclusion

Low commission estate agents surely work if you know your way around the market. Also if you get a good deal about the condition of your property and other trends and market forces, it is smart to go for a low commission estate agent.

Sellers have to be careful if they end up paying more in terms of hidden fees despite hiring low commission estate agents to escape the standard 6 percent commission. Flat Fee MLS companies like Houzeo are a safe bet.

With the real estate market getting more dynamic, it is important to do your research and see what works for you, individually.

Real estate fees, which are a percentage of the purchase price of your home, are typically your responsibility as a realtor commission calculator bc.

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Perla Irish

Perla Irish, who is more familiarly known as Irish, is the Content Manager at Dreamlandsdesign.com. She loves following trends around home and garden, interior design, and digital marketing. Through this blog, Irish wants to share information and help readers solve the problems they are experiencing.

Related Topics
  • agents
  • charge
  • estate
  • fee
  • hiring
  • listing
  • market
  • Sellers
  • services
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