Pros and Cons of Discount Realtors: Maximizing Savings or Sacrificing Service

Last Updated on May 22, 2023 by Lily Connel

Discount realtors, also known as flat-fee or limited-service realtors, offer lower commission rates compared to traditional full-service realtors. The pros of discount realtors include potential cost savings for sellers, especially for properties with high values. They provide basic services like listing properties on multiple platforms, coordinating showings, and facilitating negotiations. However, the cons of discount realtors include limited marketing efforts and reduced personal attention to clients.

Definition of Discount Realtors

Discount realtors are companies or agents that offer lower commissions than traditional full-service agents. These brokerages typically provide basic services for a pre-negotiated fee, usually ranging from 1% to 2% of the home’s selling price or a flat fee. The commissions for both the listing agent and the buyer’s agent are typically paid by the seller. In the United States, agent fees range from 2.5% to 3% of the selling price for each agent. Discount brokerages claim to save sellers thousands of dollars by reducing commission costs, but there are potential drawbacks.

One benefit of using a discount real estate broker is that sellers could receive a reduction of up to 1.5% or more on commissions. This may translate to savings of up to $5,250 on a $350,000 sale. Buyers may also benefit from the seller’s savings since it may make the home more affordable. Discount brokerages provide basic real estate services like listing the property in the local MLS, general marketing services, documentation, contracting, and legal services. They may also offer additional services for an added fee.

The main disadvantage of using a discount broker is that the reduction in commission only pertains to the listing agent. Sellers must still pay the buyer’s agent commission, which usually ranges from 2.5% to 3% of the selling price, bringing the total commission cost to around 4.5%. Another potential negative aspect is that discount agents may not put in as much effort as full-service agents, resulting in a lower sales price. Full-service agents are motivated to sell the home for the highest possible price since their commissions are based on the sale price of the property. Discount brokers may prioritize volume versus the highest selling price.

Importance of Choosing the Right Realtor

Choosing the right realtor is an important decision when it comes to selling your home. With so many options available, it can be overwhelming to know where to start. Some homeowners may consider hiring a discount real estate broker as a way to save on costs, while others may opt for a full-service agent for more personalized attention. Here are some pros and cons to consider when choosing between the two options:

  • Advantages of Hiring a Discount Realtor:
  • Lower listing fees
  • Access to basic real estate services
  • MLS listings

Disadvantages of Hiring a Discount Realtor:

  • Less time/personal attention
  • Less flexibility in contracts
  • No access to extra services

Pros of Discount Realtors

When it comes to selling your home, one option worth exploring is hiring a discount real estate broker. While this may not be the ideal choice for every home seller, it does offer several advantages to consider. Here are some of the pros of working with discount realtors:

  • Lower listing fees: One of the biggest advantages of working with a discount broker is the lower listing fees. Traditional real estate brokers often charge at least 3% while discount brokers may charge as little as 1%. This can result in significant savings for the seller.
  • Access to basic services: Even with lower fees, discount brokers still provide access to basic real estate services such as guidance with pricing, advertising, and listing your home on the MLS.
  • Greater affordability: Working with a discount broker makes selling a home more affordable for those on a tight budget or those who want to save money.
  • While these advantages are significant, it’s important to consider the drawbacks of working with a discount broker before making a decision. These include less one-on-one attention and customized contracts, as well as the absence of extra services such as staging and detailed property listings.
  • Ultimately, the decision of whether to work with a discount realtor depends on your individual needs and financial situation. Consider your options carefully to make an informed decision that works best for you.

Cons of Discount Realtors

When considering selling a home, hiring a discount realtor may seem like a more cost-effective option compared to traditional real estate brokers. However, buyers should be aware of the potential drawbacks when choosing to work with discount realtors. Here are a few cons to be aware of:

  • Less Personal Attention: Discount brokers typically work on volume, meaning they have to manage multiple clients simultaneously. This results in less personal attention and fewer opportunities for one-on-one communication and insight.
  • Limited Flexibility in Contracts: Traditional agents can offer custom contracts to suit sellers’ needs, including marketing expectations or commissions. Discount brokers tend to be more rigid in their contracts, limiting the seller’s ability to negotiate.
  • Limited Access to Additional Services: Discount brokers mainly focus on fundamental real estate services to keep their costs low. These may not include extra services like staging, photography, and detailed property listings that traditional agents typically offer.


In conclusion, it is important to consider the pros and cons of working with a discount real estate brokerage before making a decision. While they may offer cost savings and efficient online tools, there is a potential for lower quality of service and expertise. Traditional real estate agents, on the other hand, may provide more personalized service, expertise, and flexibility in the commission structure. They may also have stronger negotiating skills and access to better resources for marketing and advertising a property.