Discounters Vs. Full Fee Vs. Flexible Fee Real Estate Agents
by Robert Earl The Earl of Real Estate
Have you ever take the time to ask what is the true motivation of the Agent that you select to sell your home?
When it comes time to select a real estate agent to sell your home, you probably have 3 choices when it comes to the type of real estate agent you select based upon the Fee Structure that they use and the resulting motivation that this may or may not cause the agent to have. These 3 categories are a "full fee" structure, a "discounter fee" structure and a blend called a "flexible fee" structure.
The distinction between the different categories can be drawn in two main areas. 1.) How the Deal Comes Together & 2.) Who Finds the Buyer
A "discounter fee" structure real estate agent goes into the transaction with a fee that is significantly reduced for the amount charged by the full fee agent. This is based upon a business model that limits the scope of services that are going to be performed during the course of the transaction. In the end, this approach also will pay out more money to the party that is trying to negotiate against you, the buyers agent. Consider that the Discount Agent may be looking to "Double End" the transaction because there is more money available to the Buyers Agent as compared to the Sellers Agent. To me, this sounds like a conflict of interest, but that may just be me.
A "full fee" structure agent structures the commission charges that no matter how the deal comes together and with no concern as to which agent actually ends up working with the buyer of the property. Consider the following, there is little motivation for a "Full Fee" agent to market the property out to the buyer agent community because the Full Fee Agent may be looking to represent both the buyer of the property and you the seller of the property at the same time. This would influence what marketing avenues and vehicles that an agent would be looking to use.
A flexible fee - choose your own commission (http://www.theearlofrealestate.net/selling_flexible_real_estate_fee.aspx) structure agent will charge a flexible amount dependent upon the way inwhich the sale comes together. If the listing agent is able to attract the buyer directly then they get a minimal increase in the overall compensation, sometimes ranging up to 1% in addition to the amount being charged for listing the property. This is a far cry from the amount charged by the Full Fee agent that double ends the property and thus doubles the commission. This is also a lower amount than the Discounter charges for double ending the property from the base 1% commission to a 300% increase for working with the buyer and seller.
Keep in mind that all of this is controlled and regulated by your own areas laws on agency and whether or not an agent can truly represent both parties to a transaction under a dual or designated representation agreement. Check to see what applies in your particular area.
Bottom Line, As with anything, if it sounds to good to be true, it probably is. Make sure that you select an agent and a structure when selling your home in Northern Virginia (http://www.theearlofrealestate.net/Selling.aspx) that provides you with the level of comfort that the agent is truly motivated to get your home sold and that you will be getting value for your commission dollars.
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