Non-Crappy Full-Fee Broker Adds $124K Value To One Deal “I recently helped clients purchase a home from a crappy discount broker. My clients got an excellent deal.”

thinktom at RE Talks 4 Oct 2010 12:07 pm“I recently helped clients purchase a home from a crappy discount broker. I thought the sellers (and listing realtor) were insane with the price. My clients got an excellent deal. $124,000 less than a direct comparable across the street. Exact same lot size. In fact, ours had a second floor and garage and the other had nothing better, save for some nicer appliances. Sellers saved virtually nothing on buyer’s commission (maybe $1,000). I didn’t care. Happy clients will make my $1,000 prove to be a good investment in the future, however, that’s a hell of an expensive way for sellers to ‘save’ on commission.”

Possibly the sellers were indeed completely out of touch with market prices, and possibly thinktom did add $124K value for his clients. Alternate theory: At least some of that $124K represents market softening. Or perhaps that isn’t actually a comparable across the street. Perhaps the sellers know something about this property that the buyers don’t. – vreaa

4 responses to “Non-Crappy Full-Fee Broker Adds $124K Value To One Deal “I recently helped clients purchase a home from a crappy discount broker. My clients got an excellent deal.”

  1. And fee was only $123,500

  2. I call full fee agents the machination of a “seller’s dilemma.” Do you pay more commission to someone who can purportedly get you a higher price, or do you save $ on commissions and go discount? Answer: yes.

  3. how exactly did this realtor save his client money? It sounds like the listing price was simply low, and anyone could have closed the deal. I am looking forward to kicking the realtor business in the nuts and simply using a lawyer to do the transaction. I will be sure to communicate that to the seller and make sure the listing realtor doesn’t double-end the deal either.
    The coming changes (being able to list on MLS for a flat fee) are probably good for realtors really. The old way, if nothing is selling then they make nothing. With listing fees they can make some money even if things aren’t selling.

  4. When I sold my condo in 2007 (anticipating the crash that hasn’t really happened yet), I interviewed a few realtors. Two full-fee, and one discount broker.

    The discount broker came armed with a bunch of comps, a description of how his pricing structure was so much better than a full-fee realtor, and a scary article that said sellers need to cut their prices and sell now!!! The full-fee brokers came with comps that suggested a higher value, and talked about how they’d market the place.

    We listed with one of the full-fee realtors, who managed to get $30K more than the discount realtor had proposed listing. The net difference to us, after accounting for realtor fees, was $20K in our pockets.

    Best that I can figure is that the discount broker’s business model is based on fast sales, while the full-fee broker priced higher, with the potential that it might take a little longer to sell.

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