Discounters, Perception and Set Fee Brokers

First, I would like to give my definition of a Discount real estate broker, and how they differ from Set Fee brokers.  A discount broker is someone who charges a lower percentage commission, or a lower fee, and gives less services in return.  A set fee broker is someone who charges a set (pre-determined) fee, and is not paid on a percentage of your sales price.  A set fee broker, like myself, can be full service.

I was offended today when a veteran agent questioned if I would discuss with my client, the seller, the items which her client, the buyer wanted fixed as a home inspection request.  She said, rather rudely, “You don’t do those things, so who will?  You discounters don’t get involved with that, do you?” 

My response ws quite calm and simple. “Yes, I do. I am not a discounter, I am just not a full-commission broker like you. Frankly, I do all the same things as you, and sometimes more.”  I was stunned that a 15+ year agent could be so ignorant about different real estate models, and insinuate that I was “less” than her model.  To this point in the transaction, I had done everything a traditional broker does. Just minus the  “%”  fee.

Perception, however, is everything, and when the consumers realize they can get more while paying less, then a true revolution with take grip of the industry. Set fee brokers who create a great balance of service and a low fee, creating a great value and service, will have fantastic growth opportunity.  This is exactly what traditional brokers fear.  

Why would I choose to be a set fee broker?  1) The old business model is broken, and the consumers are sick of it.    2) Lots of repeat business and referrals!

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One Response to Discounters, Perception and Set Fee Brokers

  1. Dale Strack says:

    Mike, I get it and agree. The world does not need another commissioned real estate agent. What the world does need is professional real estate services at a reasonable cost. Paying a percentage commission is unfair to homeowners when you consider that the services you get from an agent are indentical regardless of the price of the home. So someone who sells a home for $500,000 is paying twice as much as someone with a home worth $250,000 for the same service. That makes no sense. I wouldn’t pay my accountant, lawyer or anyone else twice as much for the same work performed. Set fee makes sense. Your office provides a remarkable value. Just what the consumer wants. As other get the point everyone will do business with you.

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