Should I Use a Real Estate Agent or a Discount Broker?

Using a discount broker may be a great way to save money selling your home, but many real estate agents tend to do a minor "blacklist" of home sellers who opt to use firms to bypass the real estate agent instead. The reason they do this obvious, real estate agents will often jack up the price of a home to increase their own commissions.

There are good reasons to use a real estate agent, especially if you are looking to move into one house for another. Often the an agent knows the ins and outs of the legal procedures required and has a better clue on how to expedite the paperwork needed. Not to mention they take care of marketing your home once it is on the market. It is probably best for people looking to move into a new house rather than a house flipper who buys properties, fixes them up and sells them for a living, although depending on the amount of hassle they want to go through, they too might want to higher a real estate agency just to save time and concentrate on locating new properties and doing the necessary repairs.

However, the tactics used by many non-discount real estate agents are not necessarily illegal, but they are anti-competitive. When someone tries to list an agent independently or promote it, the person selling the house may be "blacklisted" by local brokers, forcing the person trying to show the home at an open house to be unable to find an agency willing to host one, unless of course, the person using the discount broker does it by himself.

What real estate agencies hope to do is control the Multiple Listing Services. Many realtors will list the homes they personally are selling on them, but will not allow discount broker services to show their homes on these sites or in these publications. In the past, the National Association of Realtors has been sued for this behavior.

Those selling a home will have to choose between one of the other, if saving on fees matters more, then the discount broker might be the option if they are willing to market the home by themselves. If the services offered by a realtor are more important such as filling out paperwork and marketing existing properties matter more to the seller, real estate agencies might be your best bet. The decision will be up to the seller, but real estate agencies may be forced to change their practices if the attempts to drive out discount brokers from the market:

Sources:

"Real Estate Ripoff." Michael Crowley. Reader's Digest. January, 2007. New York, New York.