Discount brokerage 101
When we first meet with sellers, we sometimes hear, “We’re tempted to use (Discount Brokerage X) to sell our home because they charge a much lower commission. We need every dollar we can get. Why should we pay you more if we don’t have to?”
For a data-driven person, this seems like an easy choice: go with the lower commission. That doesn’t always work out in the long run. We ask a higher commission because we are absolutely committed to you and to your best interests, and this translates into more money for you at the closing table. We can afford to invest more in photographing, marketing, promoting and advertising your home. In addition, every decision we advise you on serves the higher purpose of making your experience not just lucrative, but as efficient and stress-free as possible. So here’s our argument for choosing us over a discount brokerage company.
The most important thing to note about the discount commission is that it’s often misleading—and do you really want your first interaction with your listing agent to be anything less than 100% transparent? You will still pay a buyer's agent commission in addition to the listing fee.
Next, you get what you pay for. Someone who earns substantially less than other agents will not be as invested in the transaction itself, or in their relationship with you. Listing and selling a home is complicated, and it’s vital that we get to know you and your goals before we make decisions about marketing materials, open houses and tours, and ultimately negotiations and transactional details. If we had to do more transactions to make more money, we’d never have time to build trust, navigate hurdles, and guide you seamlessly through this process.
Because we earn more commission on your sale than those other agents, we can afford to be obsessed with making your home irresistible to buyers. We will understand your home’s unique attributes so well that we’ll be able to promote the unique value of purchasing it. No chart, graph, or even algorithm can do that for you. The thousands of tiny factors we take into account will add to the sale price of your home. And did we mention that we love to build relationships with our clients? We’ve had past sellers and buyers contact us years after a transaction to ask for help finding a gardener, or a carpenter, and we’re right there to help.
Want to go a little deeper? Here’s a letter we shared with our Cambridge clients who were trying to decide between a discount agent and us:
As promised, here are some statistics showing how a discount brokerage nets you less in the end.
This is the basic background showing our presence in the area:
The discount brokerage has 2 offices in Massachusetts with a total of 203 agents, with 30 current listings.
Compass has 5 offices in Massachusetts with a total of 415 agents, with 294 current listings. 69 of those agents, and 49 of those listings, are in Cambridge—and for the purposes of this report we focused just on the Cambridge office.
The Cambridge market is unique, so we ran some reports just for Cambridge closed sales. We looked at the past 12 months, in a price bracket of $750,000–$1,000,000 to reflect properties similar to yours.
We’re also lucky enough to have an actual one-to-one case study in Somerville, where two units sold within 6 months of each other in 2018, one with a discount agent and the other with a traditional agent:
There are a few factors that made Unit 5 more valuable than Unit 1 (top floor, outward facing balcony, and nicer looking furniture when the properties were listed) but certainly these differences did not add up to almost $100,000.
We have complete confidence that our attention to detail, high-end marketing, years of experience, and an excellent network of connections will net you the highest possible price at the closing table.
Are you tempted to go with a discount brokerage? Contact us and let us show you how our way saves you time, headaches and stress—and nets you more money—when selling your home.