Are Online Discount Realty Services a Good Idea?

You found the home of your dreams, but the seller is using an online discount realty service. Should you be concerned? Here’s why using an online discount realty service instead of a traditional broker is more the seller’s problem than the buyer’s   

Why a seller might be using an online discount realty service

Online brokers typically advertise highly discounted listing fees. This can be appealing to a seller, who is already braced to absorb the cost of real estate agent commissions. An online discount real estate broker typically promises sellers low fees to get them to sign on, leaving out the fact that you get what you pay for.

Online brokers depend on volume of listings to keep sales moving, and don’t bother with marketing individual listings aggressively. This can be frustrating for a buyer who expected to sell their house quickly but is now stuck with an unmotivated and unresponsive online service.  

As a buyer, however this isn’t really your problem. In fact, a seller may be excited to finally get an offer after languishing in an online broker’s database.

What buyers should know about online brokers

The seller will be paying for their agent and yours regardless. While a discount broker might offer a credit towards closing costs, a conventional buyer’s real estate agent might be willing to do the same to get a deal to close. You might be best off by checking with online brokers but also enlisting a buyer’s agent to help you find a home. 

The main problem with online discount realty services from a buyer’s perspective is that once you are involved with a seller who is using one, you can be impacted by slow responses and lack of personalized service that trickles down to you. 

Make sure you understand the range of services a real estate agent and an online broker offer, and make an informed decision. Ask questions before you make an offer on a home if the seller is using a broker:

• Who is my point of contact? (Ideally this will be one main person, with backup.)
• How many transactions have they completed in your area? (Do they know the market?) 
• How much closing credit will you get? (Does it make up for losing a full service option?)

If you are an experienced home buyer, an online discount broker may be no big deal for you. You’ve navigated the scene enough ties to know what you’re doing. If you’re a first-time home buyer, a little hand holding from your own buyer’s agent can make a big difference in your purchasing experience.