Can You Trust Discount Brokers?

“Hi Gary. I need every dollar I can get when I sell my condo next month. I interviewed a discount broker and he says he does just what a regular broker does. But I didn’t get a good feeling talking with him. Something made me uneasy and I don’t totally believe him. Do you think he’s being truthful about what he does?”

***ANSWER:
No.

In MY experience, discount brokers don’t do what a good, experienced, full-service broker does. Of course, I’m sure there are exceptions. I just haven’t seen any.

Running a real estate business is just way too expensive when done right and doesn’t allow for proper service at cut rates. Heck, just my advertising bill is over $10,000 per MONTH! You can’t lose money selling each home and make it up on volume.

(By the way, in my opinion, calling them “discount brokers” is like calling Yugo a “discount carmaker”. Yugo was just a “cheap” carmaker.)

For years, while telling the public they do all the seller’s important work, behind the scenes such brokers often dumped much of it on the buyer’s broker. This was a major disincentive for full-service brokers to sell their homes. (Would you do 50% more work w/o extra pay?)

So starting 2004, the MLS requires listings by many discount brokers to be flagged as “Limited Service”.

In summary, let’s do the math.

“Save” 1%. But if due to less marketing, less service, less skill, less negotiation, and less interest from other brokers, you get 3% less on your price, who’s saving money?

Are you better off with a Limited Service or discount broker?

Draw your own conclusions…

Selecting A San Diego Real Estate Broker