Traditional full-service broker: The broker/agent pays for all advertising and promotional costs, including the multiple listing system. You have a single point of contact. The agent handles the negotiations. The cost is typically between five and seven percent of the sale price based on success only fees.
Discount brokers: The cost is typically one to three percent for the listing broker. Still, it does not include any additional commission for the selling broker, which is 2.5 to 3 percent. This category also contains brokers that rebate commissions, use flat rate fees, and MLS only fees. There are additional selling agent fees and closing costs. Some of these companies charge upfront for service.
For sale by owner: The seller handles the sale directly and pays all costs associated with a home. They show their home, hold open houses, and take on all the little tasks. The cost could include paying a real estate agent when they produce a buyer, advertising and promotion, and all associated closings costs.
Guaranteed sale brokers: The basic strategy is a lower price guarantee at the end of a negotiated period. The home is promoted at a higher price with pre-agreed price adjustments before the expiration of the period. With a guarantee, the home seller is free to purchase another home. The goal is to sell the old house before the broker has to buy it. The fees are generally higher.
iBuyers: The iBuyer takes a different approach. They buy the home directly from the seller and then handle the home’s sale after the fact. The sellers have no involvement with the typical process. The seller must agree that the iBuyer handles any necessary repair using the company and pay for those repairs out of the closing proceeds. The seller must also agree to a service charge that is akin to a commission, but like the guaranteed sale, is at a premium. iBuyers currently only operate in larger, robust, markets.
More change is coming