Home Remodels What’s the True Cost of Selling Your Home with a Discount Broker?
- Matt Miner,
- October 2, 2017
One of the most popular discount brokers out there right now is advertising that they can sell your home for 103% of its listing price with only a 1% listing fee. That probably sounds great upfront—but do the numbers back it up?
What many people don’t realize is that in the Seattle area, the average home sells for 104% of its list price—which is already higher than what the most popular discount broker is promising. This means that the average broker will still earn you more—by a whole 1%.
When you compare that to the fact that our team sells for an average of 118% of the list price, there’s really no competition. While discount brokers make a lot of promises up front, you need to think about the overall outcome of the sale.
One of the big reasons is that we offer advice on what the seller should change about their home to make it more appealing to buyers. Recently, we were working with someone to sell their home. The discount broker before us had listed it $750,000 and couldn’t sell it in 6 months.
When we came along, we knew that the listing needed some work. We had our seller clients spend $20,000 getting the listing ready: they painted the exterior (including the door), they changed the style inside, and painted the interior. We had the owners move out, had the home professionally staged—the home looked completely different. And we marketed the sh*t out of it. Their home had a beautiful website, was all over the internet, and got 30,000 clicks on our Facebook post advertising it.
We listed it for $739,000 (we did the price reduction because we needed to give buyers a reason to check out the same listing again) and we were able to sell it for $841,000 in ONE WEEK with multiple offers! Taking the $20,000 that the sellers spent prepping the home into account, in the end, the sellers were able to net almost $80,000 above the listing price.
When the home could have sold for 15% or more of the listing price, there is NO deal on your home selling for 103% of its list price, or paying a 1% listing fee. Especially if your home takes several months to sell. During the summer, home prices go up as much as 2% per month (and in the winter it’s more like 1% per month). If your home takes more than a couple of weeks to sell, you’ve already lost your (small) advantage.
There are a few reasons why we’re able to sell homes for so much more than discount brokers (and other real estate agents). Here are a few reasons why you want to rethink using a discount broker:
When you’re selling your home, you’re selling a product, and it needs to be marketed and packaged properly. You’re not selling an iPhone out of a bin of hundreds of other identical iPhones—you’re selling a unique product. Who is the person who is going to buy this home? What do we need to change about this home to make it as appealing as possible?
Your order starts with one person, and your order is passed down the line from person to person. There isn’t one person who is holding your best interests at the forefront of things throughout the transaction. The leading discount broker is also very much a training ground for new real estate agents, and once they become good and proficient, they leave and start their own businesses.
A real estate agent should be able to help you with every single detail when it comes to selling a home, buying a home, and owning a home. Which house should you buy? Which home will fare well if the market changes? Which contractors should you use? You should be able to find an agent who you can turn to no matter what.
The thing with buyers is that they don’t always know why they do or don’t like a house. They won’t be able to point to a specific reason. A real estate agent should be able to help you create a product that will give buyers that “feeling” that they like a house. A home should flow—photos should keep people’s eyes moving. There are a million cues that can tickle someone’s subconscious, whether it’s a weird smell or an outdated kitchen. If your listing agent makes suggestions for things you need to change and they have a good track record, listen to them!
How? People on the other side of the deal trust that we have property prepared our clients. Our clients know that they have to close no matter what. We’ve developed relationships around other agents and they know we’re reliable.