What Advantages do Independent Real Estate Brokers Offer?

Are real estate franchises more effective at selling homes than smaller independent real estate brokerages? Large franchises have big budgets to run advertising on TV and other media. Brand recognition is a major component of this type of business. Many of these franchises have been around for decades.

Similar to other fields where independents compete head to head with large franchises, independent real estate brokers have gained ground in the market over the last decade, mostly thanks to the Internet. Online listings have become a huge factor in buying and selling homes.

Consumer Reports tackled this issue in their September 2008 survey on real estate brokerages. Their survey indicated that there is no difference in satisfaction level from sellers working with independent brokers vs. the major franchises. However, the survey did show that independent brokers were more likely, and had more freedom, to lower commission rates when asked.

This information is rather less than astonishing. Today’s real estate market has changed greatly from the market that franchises ruled thirty years ago. More than half of the brokerages in the business today are independently owned rather than franchised, according to the 2009 National Association of REALTORS Member Profile. Competition is fierce, buyers are more knowledgeable, and the Internet allows anyone to search the MLS (multiple listing service) of homes and find promising properties in their price range. Much of the legwork that agents used to do has been eliminated.

What might be surprising to learn is that independent real estate brokers, despite their “boutique” image, often offer cost savings over the big-name franchised agencies. Since independent firms don’t have a franchise taking a portion of their commissions, they have more ability to negotiate and be flexible about commissions and fees. The Consumer Reports survey validates that independent brokerages compete directly with the franchises by actually lowering commissions more often than franchise agents do.

Franchised agents typically charge between 4 and 7 percent with the national average at 6 percent for a home listing. Franchises brand themselves as offering more services than independent brokerages, and tout being listed with their extensive referral network as being worth the money. But does paying a higher commission to sell your property make sense in today’s Internet-driven real estate market?

The Consumer Reports survey looked at the difference in services offered bt an agent that charges a 3 percent fee vs. a 6 percent fee… and the discrepancies they found are, taken together, fairly negligible. A markedly higher percentage of the brokers who charge higher commission rates placed newspaper ads, but, on the other hand, a slightly higher percentage of the homes placed with agents who charge 3 percent sold within the first month. Most of these discounted brokers are, by necessity, independent rather than franchised.

Statistics illustrate that franchised agents don’t sell any more properties than non-franchised ones. The individual agent or broker’s track record matters far more than the name behind them when it comes to getting results. Procuring the assistance of a good discount independent real estate broker can mean saving thousands on commissions and listing fees while still getting the level of service you need to successfully sell your home.

Red Dot Real Estate is an independent real estate broker representing White Rock and South Surrey, B.C. townhomes and single family homes. Red Dot offers lower MLS listing fees and expert advice for buyers and sellers, as well as customized marketing programs for developers and home sellers. Powered by SEO 2.0 Services