I like a deal….I don’t mind admitting it. I work hard for my money and if that money can be stretched a bit farther, then there is no shame in that. However, and this is a big ‘HOWEVER’, I do not skimp on important things. Let me tell you how I have learned this the hard way –
I wanted to hire a painter to paint the exterior of my home. It wasn’t in bad shape, but it needed prep and primer and paint. I interviewed several painters and I got many different prices. Many of my friends talk about how they choose the ‘cheapest’, the ‘lowest price’ and I thought, “ok…..I will pick the cheapest priced painter this time, everyone else seems to be getting a deal.” My experience was not a good one. The painter dripped paint on my cement, on my brick, on my windows. He touched the handle of my gate with his hand that was full of paint and the job didn’t last as long.
I realized many of the reasons his paint job was cheaper had to do with things like watered down and cheap paint, didn’t want to use more than the bare minimum in plastic drop cloths, didn’t have the best brushes and rollers and he was sloppy because he was in a big hurry to get to another job.
So how does this relate to a discount real estate brokerage? Statistics show that most real estate agents do less than five transactions a year. Using a general commission of 2.5% per transaction, that calculates to a gross commission of between $50,000 and $65,000 a year depending on where you live. By the time they pay the broker, pay the brand they work for a royalty fee, taxes and general business costs they would be left with about $31,000. That’s about $2,600 a month to live on. Now – Imagine that same Realtor is agreeing to take your listing at a lower commission structure? How much time and energy will they have for your deal? They have to go out and get another deal to cover the cost of their loss in commission. It’s pure economics.
Be careful about the ‘cheaper’ deal. If your Realtor can’t negotiate for themselves, what makes you think they will negotiate for you? It’s not like a paint job that you can fix, oh no, once you sign that listing contract you are locked in and can’t get out. Don’t select the cheapest Realtor because you think everything is the same – the same MLS, the same property fliers and open houses. That is NOT the case. The real estate industry did an audit once and reported that 40 people work on the sale of a property. You most likely only see two, your Realtor and the other parties Realtor.
My cheaper painter didn’t prep well, didn’t have the proper tools and as a result didn’t paint well. It’s never a good idea to get the cheapest attorney, accountant, auto mechanic or Realtor. You will end up paying more in the end.