The typical home buyer or seller is used to working with a “full service” brokerage or agent. Think of full service agents as your traditional Realtor® who assists you from start to finish with the purchase or sale of your home.
As a buyer, your full service agent has probably said you won’t owe him or her a dime, and not asked you to sign anything formalizing your relationship. As a seller, your full service agent likely has asked you to sign a listing agreement, which contains a percentage commission due to the listing broker at closing. For many consumers, the full service route is the most sensible way to proceed.
You may not know it, but in the past 5-10 years a new breed of brokerages has emerged. Commonly referred to as “limited service” or flat or fixed fee brokers, these agents offer a subset of services at a reduced price.
These agents may offer to place your listing on a local multiple listing service for a fixed fee (for example, $300.00 for six months). That may be the one and only service they provide sellers. Limited Service agents representing buyers may offer their clients a rebate in exchange for performing fewer services for the buyer (often times those countless hours spent driving from one listing to another, when buyers really get a feel for what they want, where they want it, etc.).
Some brokerages offer both full and limited service options. Others offer full service representation, but at discount (commonly referred to as discount brokers).
The point here is that in most states, you have choices. You may want to stick with what you are used to – a full service Realtor, or, mindful of your abilities (and limitations!), you may opt to utilize a limited service agent who will save you some money.
Unfortunately some states have passed laws prohibiting anything less than the provision of full service to buyers and sellers in some contexts (think of walking into McDonalds and being told you have to buy one of the Meal Deals . . . you can’t just buy fries or a drink by itself). In other words, a la carte options are illegal! Other states have similarly passed laws prohibiting rebates, which limits the ability of brokers to compete on price. Apparently some legislatures, heavily influenced on these issues by the Realtor lobby, have concluded that competition isn’t such a good thing, and have even gone so far as to suggest that such laws are intended to protect consumers. Unreal.
Anyway, off my high horse. Just remember that you likely have choices when it comes to level of service and price when working with a real estate agent. Be sure to ask prospective agents lots of questions, find out what you will (and will not) be getting, and what those services are going to cost you.
