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A Discount Agent vs. A Full Service Agent
A discount agent has a discount orientation. Their value to you as a seller is that they offer to perform their service for less money. Their focus is on saving you money. That is, the discount agent focuses on the smallest part of the transaction - 6% or less in commissions.
A full service agent, on the other hand, is retail oriented. Their value to you as a seller is their ability to produce a higher sales price for your home. Their goal is to net you more money at closing after all your fees have been paid. The full service agent is focused on the sales price of your home which is the largest part of the transaction - 94%.
Where do you want your agent’s focus? On the 6% or less part of the deal.....Or the 94% part of the deal?
These are two very different approaches to the sale of your home. Discount agents use commission cuts as a tool to get your business. Full service agents use commission as part of their marketing plan to attract more buyers to your home in the effort to net you more money for the sale of your home. Discount agents feel certain pressures regarding volume, time, and money that full service agents don't experience.
When an agent lowers their fee from 6% to 5% it equals a 17% reduction in their pay. When they lower from 6% to 4% they have reduced their fee (and income) by fully 33%. Therefore discount agents must close a higher volume of transactions in order to make up for their reduced fee. And since they are operating on a lower profit margin than a full service agent they simply can't afford to keep a listing on the market for very long before it starts costing them money. Consider how this affects you as a seller:
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