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  • Macy Joselyn

Discount Brokers: Is it Worth the 1%?

Updated: Mar 25


I will start by being honest. Yes, there can be some pros when using a discount brokerage to sell your home. But do they outweigh the cons? We don't think so.


We tell all of our clients when we meet them to do their research! Interview multiple agents, research the market yourself if you’d like and ask as many questions as you can. It is important to know and have a full understanding of the services you will be receiving from your agent. It is also important to have a good relationship with your agent and know that they are someone you can trust and feel comfortable with. Buying and selling a home are huge transactions that need to be handled delicately and to your standards. So, let’s get into it!



Only 1% Listing Fee! (Sort of)


Back to the potential pros of using a discount brokerage. Some of the things that they offer are discounted commissions. As a seller, you pay out the agent’s commission, so by having a lower percentage, that could save you a decent amount of money when it comes to closing costs. For example, “full service” agents usually charge around 3.2% in Colorado, of the total purchase price of the home, whereas a discount brokerage will charge as low as 1-1.5%.


So say you sell your home for $500,000. 3.2% of that is $16,000 and 1.5% is only $7,500. Obviously that is a big chunk of change back in your pocket! BUT, something to consider and keep in mind is, the seller also pays out the buyer’s side commission which is usually set around 2.8% in the state of Colorado. So back to selling your home for $500,000. To pay the buyers side of the listing would be $14,000. Think about it this way. You are paying more for the buyer's agent than you are the listing agent, meaning you're paying more money to the person that isn't working for you and in YOUR best interest.


Don’t let the 1% listing fee fool you! By the end of the deal, you as a seller are still paying out anywhere from 3% - 4% in commissions. Long story short, yes, it looks like you're saving money, but really you aren't.



Provided Services:


Things like staging and professional photos are not included when you list your home with a discount brokerage, so really, you end up having to pay for these services out of pocket. That money you "saved" from their commissions, is going right back into the sale of the home and YOU are the one that has to do the work for it. Staging has been proven to increase the sale of your home by up to 15%. Full service agents also negotiate for you. By having the power to negotiate we can get you more money for your house. Full service agents work hard for you, and only you which means they want to help you sell your home for as much as possible and that can only be done through the power of negotiation. This is not something that discount brokers necessarily focus on, they just want to get your home closed and onto the next.


When you list with a full service agent you receive these services as part of the commission, without having to lift a finger. So before you hire a a discount brokerage to list your home, ask yourself, are you in the market for a part time job?


Something to keep in mind is that agents who work for discount brokerages usually have a much higher volume of clients than a traditional full service agent would. So you as the client may have to sacrifice things like constant communication through the process, only reachable during “business hours” and having to juggle with multiple agents during the process rather than just one. Let’s dive deeper into what this looks like.


We have worked with many many agents in our 20+ years of experience, and most would agree that real estate is NOT a Monday through Friday 9-5 job, I can promise you that. Situations may arise at 7 PM on a Saturday night that need to be dealt with. Maybe as a buyer you submitted an offer on the home of your dreams Friday night at 8 PM. You need an agent who is flexible and understands the fluidity of real estate.


In our last brokerage meeting, one of our fellow agents told us about a deal that she just had closed. Her buyers were thrilled and couldn’t wait to move in. The listing agent gave them the keys at closing and when they got to their new home, they were the wrong keys. The buyer's agent immediately called the listing agent (who was from a discounted brokerage) and was told “the deal is done so it is no longer my problem”. The buyers had to get and pay for a locksmith before they could even open the doors to their new home.


Let me give you another situation we encountered. We were already under contract on a home for buyers. The home was listed with a discounted brokerage. Part way through the process we had some things come up that needed to be dealt with (as all transactions do). No big deal, you just call the listing agent, right? Nope. The only contact info we were given was a number to the office and an email, so after 5 o’clock, no one was there to answer.



This was probably a lot to take in. If you are looking into the best option for you, like I said, do your research. Only you know what is the best route to take for yourself. Maybe you’ve sold many homes before and don’t want or need your hand held through the process. Maybe it’s a quick cash investment property that you know will be a quick and easy closing process. Whatever your situation, research what suits you best.



What Can you Expect with the Rhae Group?


Listing with the Rhae Group, we can guarantee that we don’t work “hours”, we negotiate from beginning to end for YOU, and we pride ourselves in constant communication. Things like staging, professional photos, walk-through videos, online marketing and so much more, are always included in the services that we provide at no additional cost. By providing these services, we can get you more money for your home that a discount broker wouldn't do. Even once the home closes, we are always a resource for you in whatever you may need, because even though the deal may be done doesn’t mean that things can’t still come up.


Do your due diligence, interview a few agents and find what works best for you. Real estate is a big investment and you need to feel safe and comfortable in your decision, whatever that may be. It doesn’t have to be a scary or unattainable thing when you have the right people in your corner!






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