DISCOUNTED SERVICES?

How Do Discount Real Estate Services Work?
By Pierre Mouchette | Real Property Experts LLC

Also referred to as “rebate” or “internet” real estate services, discount brokerages are not new.  Real Estate and Mortgage Broker Houses provide these discount services.

Real Estate Brokers – list your property, and at closing, the buyer or seller receives money back in the form of a rebate.  The rebate, in many instances, comes from the real estate agent’s commission.  The going rate for a real estate agent’s commission on the buyer and seller side is 3 percent apiece (6 percent total). 

Real Estate Brokerage

​Traditional Agent
Independent Contractor

• Must be educated in Real Estate to obtain a license.
• Must have on-going education certification in Real Estate

Generates their clientele

• Professional Agent (full-time and works 24/7)

Although there are some part-timers, successful agents are generally full-time

• Must learn strategies to obtain or close deals (Extensive training in marketing, negotiating contracts, prospect management, etc.)
• Pays for the marketing of their listings

Commissioned only

• Must close transactions to get paid

             
Rebate Agent
The rebate agent is usually an employee of the brokerage house

• Many agents are part-time.  Real estate is their second job, not a full-time career

Some brokerage houses pay a small salary; commissions are smaller than traditional brokerage house

• The agents work with leads generated by the brokerage’s marketing department.  When the transaction is completed, you will most likely not hear from the agent again because the seller is a real estate brokerage client.

Works with the house Listing Package

• With these packages, the more the client pays, the more they get back at closing.  Very little time and attention are invested in the client or their properties.

Obtains the buyer package from the brokerage house

• With this package, the buyer receives money back in the form of a rebate.  The rebate, in many instances, comes from the discount brokerage house.

Mortgage Brokerage

Rebate Mortgage Brokerage

• It is dependent on the mortgage broker being independent.  The downside is that the broker does not shop around for the best deal, but they work with a few selected lenders.  They charge fewer points (rebate) for securing the loan.