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Cut Rate Commissions

Cut-Rate FSBO Listing Commissions

With the advent of the web, some agents are offering "cut-rate" commissions. Sometimes, lower commission rates equate to a lower level of service by your listing agent. This is not always the case.

If all you want is to be listed on the Multiple Listing Service with a sign in the front yard and no other marketing or promotional services, then a cut-rate commission company may be right for you. There are a few discount Brokers that offer different levels of services for a lower fee or there are companies that charge a "typically normal" commission and perform the functions of a Full Service Discount Real Estate Broker.

If you want an agent who will actively promote your property to other agents, spend time and money on marketing and extensively promoting your property, who has made a long term commitment on the internet and marketing your property locally, then you probably are not going to get that level of service with a reduced commission rate.

Another common practice when you see an advertisement for a reduced commission is that the compensation is lowered only when you agree to buy your next home through the same agent or broker/or you must buy of their own FSBO Listings (less choice for you)/or the listing broker must list and also sell your home to a buyer themselves (therefore collecting all available commission) or else no discounts apply. Be careful and read all the fine print. You will usually find a some hidden loophole or condition.

Sometimes, the reduced commission is not really being offered on the sale of your existing home but on the purchase of your next one. Unfortunately, the advertisements are often unclear or vague regarding these items.

You may also see ads that proclaim "maximum 2.5% commission"; and again, reading the fine print of the ad is advisable, you will see that this is usually only one half of the total commission that is being charged, so in reality there is no discount on the commission at all. Again, be careful and read the fine print.

When you see an advertisement or an offer for a lower commission, you should carefully analyze what you are giving up by accepting such an offer. All the details will probably not be readily apparent in the advertisement and you will have to investigate further and dig deeper to get the truth.