You may have come across terms such as discount or low commission realtor but wonder how they operate. You may also wonder whether the term ‘discount’ actually is effective for saving money on a property deal which involves six or even seven figure digits. However, discount brokers are no different from any standardfee brokers because real estate commissions are all negotiable.Still, these discount brokers have created a different niche for them in the real estate market promising the sellers to save money from their sales proceed and the buyers to provide rebate commissions. All this is done in hope to capitalize on the increasingconsciousness among consumers.
How Do They Operate
The commission charged by the discount broker is lower than the traditional brokerage fees. As for example, if the traditional rate on sales price is 7%, the average fee for co-brokering is often as low as 3.15%. Therefore, the listing agents make lot more money than any selling agent.The reason sellers and buyers accept reduced service is to save money. It is the primary motivation to use a low commission realtor by the sellers who are savvy about selling their homes and do not want a full-fledged advertising campaign, especially in the seller’s market.
Different Types Of Policies
There are different types of policies followed and one such is the flat-fee listing policy. This is a flat rate for brokerage on top of the amount given to the selling brokers. Small percentagefee listing policy is another in which a listing fee for 1% or 2% is charged in addition to the amount paid to the seller.Buyer commission rebates is one more in which the agent credits the buyer a specific percentage at flat rate from the buyers. There is another [policy called graduated fee policy offering an abundance of fees and services.