By Greg Parker
Discount offerings are not a new concept in real estate, but there has been a real resurgence of low-priced options in recent months. These upstarts claim to level the playing field, and put more money in sellers’ pockets. But simply saving fees doesn’t necessarily equate to netting more. Even if you do save some money on the listing side, you’re still on the hook to compensate the buyer agent (but most discount brokerages conveniently forget to mention that part). Hopefully the buyer agent isn’t a top producer; it would be like taking someone to court, paying for their high-powered attorney, but you figured you’d save a few bucks by representing yourself!
Although some traditional agents are ‘overpaid’ for providing mediocre service, there are a number of full-service, rockstar real estate teams (ours included) that will exceed your expectations. The savings promised through discount models actually comes directly from slashing a sellers’ marketing budget. Shooting yourself in the foot couldn’t be any easier. But a good agent will earn every cent of their commission, and then some.
It doesn’t take long to do some simple research to find out that new players like Purple Bricks – the U.K. discount real estate start-up that recently launched in Canada – aren’t for everyone. Customer dissatisfaction and a lack of transparency are common complaints from Purple Bricks customers abroad and in the U.S.
A professional, experienced agent is not going to work for a discount, Purple Bricks-like company for a flat fee that they then have to split with the company. The discount agent gets paid the same regardless of the outcome, upfront. So what’s the incentive for both the agent and Purple Bricks committing to do the best possible job for you? You’re saddled with an inexperienced, struggling agent that has little local expertise, no industry clout, or beneficial networks.
Oh, and what about staging, painting, cleaning, moving, storage, home inspections, social media campaigns, open houses, multiple offer presentations, coordinating with lawyers, project-managing tradespeople, and days of tense back-and-forth negotiations to get a deal done? Yes, this is what REAL agents do. Without this, I can guarantee that you’ve left money on the table (a lot more than any commission you would have paid to a professional).
Contrary to popular belief, real estate commissions in the province of Ontario are in fact fully negotiable, so ask your agent what you will get for the fee charged. You must feel confident that they can get the job done from the outset. Any good agent should be able to provide you with flexible fee structures based on the services you need, and you should clearly see the benefit of full-service over discount.
Remember, if something seems too good to be true – it probably is. You get what you pay for, and you overpay when you don’t do your due diligence and ask the right questions.