What is a “Discount Agent”
A discount agent is an agent that offers to sell your home for a lower listing commission than the industry average. They typically also offer buyer rebates (within 40 states).
Why the term “Discount Agent” is wrong
In the real estate industry, there is no set commission rate. In fact, is it not legal for the industry to set a standard rate that everyone must follow. Everything is negotiable and will vary depending on the agent, city, market, etc. So, if there is no set commission, there isn’t a way to “discount” it. If I were a guessing woman, I would think the term “discount agent” came from some very traditional higher-ups in the industry that wanted to set the tone for consumers to believe that this type of service is cheap, not valuable, etc.
Bobby Bryant, CEO of AskDoss
, always uses the term “Fair Priced Agent” instead of a discount agent, which seems to make more sense. So, for the rest of this article, let’s go with fair priced instead of discount.
Things to pay attention to when searching for these services
There are MANY
platforms out there that offer savings, but not all are created equal. If you are considering using a fair priced agent, you want to go with one that works for a fair priced brokerage (company). These agents are typically paid a salary or, unlike most traditional agents, can retain the total commission earned.
Some websites offer 1% listing commissions, but do not have agents employed with their company. Instead, they farm out their leads to traditional agents willing to take a listing for 1%. With a traditional agent, they also have to pay their broker a cut of their commission earned (see how commissions work
), which leaves them with even less than 1%. What is worse is that these companies take a referral fee for sending the agent your information. You have to question what type of service you get when the agent isn’t paid a salary or supported with some of these fair priced brokerages structure and tech. These companies are easy to spot as they carry a brokerage license (license # will be posted on their website) but do not buy or sell homes.
There is an exception to this statement, and that is HomeOpenly
. HomeOpenly does not carry a brokerage license and lets the traditional agents decide what they will offer and does not take a referral fee for their service.
Most advertise their listing commission, but will suggest you offer a buyer’s agent commission. So, while they will list your home for 1%, they might ask you to offer 3% to the buyer’s agent, which means you are paying 4% in commission, not 1%. Rex
is a fair priced brokerage that does not suggest you pay the buyer's agent, but know that they market your home differently and do not put it on the mls.
Some fair priced brokerages will offer you a buyer’s rebate, but that is only if you also use their services to sell a home. Be sure to understand their “rules” before signing an agreement with them.
Not all Fair Priced Brokerages are created equal. Some have you do more of the work, while others operate just like a traditional agent. Some even offer Ala carte services that let you pick and choose what you are willing to do. Always ask questions and read the fine print to know your exact responsibilities.