Discount Brokers and Volume (broker, home, buyers)

[Captain Bill]

Here is an article that is worth reading. I am not posting it to degrade discount brokers, because as I said in another post, every home seller may be capable of handling part of the transaction themselves, and a discount service can be just right for them.

Discount agents and brokers typically rely on volume and a lowering of services provided in order to be able to offer discount prices. While the commission fee is not set by anyone, it's commonly known that it takes 6% (3% to listing agent and 3% to buyers agent) in order to successfully operate an agents business. That is even more important in slow markets.

When discounting, the brokers and agents must rely on volume or they cannot survive. In slow markets the volume is not there, so the discounters get hurt, and in many cases, the sellers who have listed with the discounters get hurt.

This link takes you to an article that discusses the bankruptcy of Foxton, a large discount firm based in New Jersey, and what is happening to the sellers who have listings with the company. The judge will make the final decision on what will happen to their listings.

Realty Times - Agent News and Advice

All listings of agents actually belong to the broker. The listings are an asset of the broker and can be sold if a broker sells his/her brokerage. The bankruptcy court is saying that should be the case in bankrupcy proceedings also. Until that is settled, the sellers listings are in limbo.

In this market, in addition to choosing an agent, a seller should consider the ability of the company the agent is with to withstand the low volume time that the market is experiencing at this time.

Bill