Julie Curran and Nicole Farrell
Re/Max All-Stars Realty Inc.
Independently owned and operated.
144 Queen Street
Port Perry, ON L9L 1A6
Toll Free: 1-866-507-2375
Consumers are always looking for ways to save money, and paying real estate commissions can amount to tens of thousands these days. Not an insignificant sum to most people. Is it worth it to hire a full-service real estate brokerage over a discount service? Reasonable question.
Type of Marketplace
MLS and the Internet
We cringe when we see new listings hit Realtor.ca without a photograph because we know that agents and buyers are passing them over without a second thought. The Toronto multiple listing service accepts up to 9 photos. For that reason, many full-service agents hire professional photographers and shoot double the photos required.
When we see a photograph taken by the agent instead of a pro, we also see a lazy real estate agent who doesn't care enough or isn't getting paid enough to properly market their client's property.
Lots of mom 'n' pop operations and discount brokerages don't spend money on professional signs because they don't believe in it or they can't afford it. Good signage is free advertising. Many full-service firms will advertise:
Full-service companies tend to project quality, and that means four-colour flyers and newspaper advertising. Full-service marketing is first class.
Not all homes are right for an open house, but those that are require finesse. This means working the buyers who come through by pointing out impressive features of the home without making the buyer feel oppressed or hounded, and that in itself is an art. It requires the service of an experienced salesperson. Many discount brokers refuse to hold homes open.
Full-service agents counsel sellers. They find out what made the seller decide to buy the home and how that moment happened. Then, they employ that knowledge at open houses. For example, suppose a seller said that moment came when she first stood gazing out at the pool. When she turned to her husband and gasped, "I can't believe we can afford to buy this home." Good salespeople at an open house would ask buyers to stand in that same spot by the pool. Then, they'd share the seller's first experience verbatim.
Real estate is an extremely competitive business, and there are many agents fighting for the same listings. A full-service agent who wins the listing is probably a good negotiator, a person you want on your side during offer negotiations. Think about it. Agents who can persuade you to pay what they feel is reasonable, will probably persuade a buyer to pay your price. Ultimately, that means more money for you.
Final Sales Price
Sometimes full-service agents lose listings because the seller was promised a higher price based on hot air and a lower commission. It's these listings that often show up in MLS a month later with reduced prices. The amount of the price reductions, not surprisingly, tend to exceed the difference in commissions between the dueling agencies! In these scenarios, sellers received fewer services and ended up losing money on the sale as well.
If you can't decide between an agent who charges 1 or 2 percent less than another, think about how you would feel if you had to reduce your sales price, say five percent, to get the house sold. Ask the agents to show you their last 24 months of price reductions and compare them.
How Much Do Agents Make?
Agents are paid by brokers. Brokers retain a portion, sometimes 50%, and pay the balance to the agent. From that, the agent pays her overhead and taxes, which can easily amount to 50% of the net. A listing agent's true salary ranges from 20% to 30% of one half the commission. Full-service agents typically spend more on overhead than their competitors; by refusing to compromise service, they tend to charge more.