There have always been choices when it comes to hiring a real estate agent. From do it yourself brokers that put your home on the MLS with pictures you provide for an upfront fee, to full service companies that charge up to 7% of the sale’s price. Then within each company there are many different agents with different styles, experiences, talents, and ethics.
It’s a lot for the consumer to sift through.
I want to discuss one of the options: Free.
There are several companies and agents who are trying out a plan where they charge no commission to list your home. In turn you must agree to work with them on the purchase of your next home, where they will be paid a cooperating commission from the listing broker of that home.
And they do everything a full service agent does, except for open houses. But you are free to hold your own.
Trust me. Don’t expect them to do anything other than put your home on the MLS and put a sign in your yard. And they may charge a fee for that much.
Here’s why I don’t like it:
1) It’s not free. You still have to pay the cooperating broker that represents the buyer. That’s typically 2.7%.
2) You’ve now entrusted what’s most likely your most valuable asset to someone who has told you that what they do is of no value. If it was of value, they would charge you for it. I’m willing to cut your hair for free. Any takers?
3) Saving $6,000 in commission and then selling your home for $10,000 less than a good full service agent could negotiate for you is hardly a deal.
4) You have a no-value, limited-service agent on your side. The buyer may have a full-service, full-value agent on theirs. Good luck.
5) The financial incentive of your agent is not connected to the price of your house. It’s only connected to the price of the next home you buy. Their best case is to under price your home and sell it quickly at minimal expense to them.
And remember, I’ll LIST your home for free too. But I will charge a commission when I SELL it.
And you WILL sell it.