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How do Discount Real Estate Agencies Work?

How do Discount Real Estate Agencies Work?

Commissions paid to real estate agents are always negotiable, but this is something a lot of sellers don’t know. The payment of commissions is the major cost that comes with selling property. 

If the commissions to be paid is too high, it might mean a difficulty to pay the mortgage on the property or even breakeven. If it’s low, then it means more cash for you as a seller. 

This article will explain how discount real estate agencies operate and how they can help you get more money from the sale of your property through lower commission payments. You can also find out exactly how much you’d pay in real estate agent fees in Canberra

What are Discount Real Estate Agencies?

Discount real estate agencies are agencies that sell property for you for a cheaper rate of commission payable than traditional real estate agencies. The reason they are able to do this is because they have identified that they can sell a lot more properties if they charge lower commissions. 

For discount real estate agencies, it is a numbers game, in which the volume of sales compensates for charging lower commissions. As a result, there is a likelihood that the level of customer service would be reduced. 

This doesn’t mean that the customer service would be of the lowest quality, no. It simply means it would not be at the level of traditional real estate agencies. 

If this is something that is very important to you, then we advise that you choose to work with traditional real estate agencies. 

 How do Discount Real Estate Agencies Work?

How Do Discount Real Estate Agencies Work?

Discount real estate agencies have a lot of similarities with the traditional real estate agencies, with the main difference being the obvious; an overall reduced service fee. Since they charge reduced compensation packages, they earn primarily through various methods of commission splits. 

These commission splits are customized for their type of model, and they are aimed at maximizing income for them to compensate accurately for the lower amounts of compensation charged. 

The following are the commission splits used by discount real estate agencies. 

1. Flat Fee Listing (MLS only)

This type of commission split charges a flat fee for the use of multiple listing services, basically. 

All the agency does for you is to input the details of your property into multiple listing services, and then you’re on your own. You will also still be responsible for paying the buyer’s agent’s commission. 

This commission split basically makes the industry marketing tool available to clients in exchange for a reduced price. It’s best if you are going the FSBO route, as the prices can be as low as $140. 

2. Reduced Commission Percentage Listing

This commission split provides the usual service for a lower commission rate, say 1.5%-2%, though some agencies can go as low as 1%. This is independent of the seller paying the buyer’s agent commissions, usually 3%.

The service is usually streamlined, especially if handled by an experienced agency. This is because they will already know what to do to get your property sold fast, and will also have the advantage of having built valuable connections with key agents and agencies in the industry. 

For this type of commission split, discount real estate agencies typically use technology very well, as it helps to automate and streamline as much of the processes involved in selling a property as possible. 

3. Reduced Commission Flat Fee Listing

This type of commission listing involves the discount real estate agent agency offering to sell property for a flat fee, independent of the price the property sells for. The fixed price is usually between $2,000-$5,000. 

The level of service to be offered will be solely determined by the contract agreed with the discount real estate agency. This is why it is important to read the contract properly before signing with any australian real estate agency .

In Conclusion

A discount real estate agency might be the way to go, especially if you’re looking to save some much-needed cash. This is why it’s important for you to know how exactly they work. 

This will help your decision-making, and ensure you get the best value for your property in the end.