Discount Real Estate Commissions - An Alternative Business Model

The phrase "discount real estate commissions" implies that there is a standard commission from which one can discount. All real estate commissions are, and always have been, negotiable.

Though certain commission percentages are mentioned frequently in the media as being "standard", the consumer has always had the ability to negotiate the commission with potential listing brokerages. The fact that certain percentages seem to dominate tends to allow anything less to be called a discount commission.

Marketing aside for the moment, the time and tasks involved in listing a property and assisting the client through to closing can be very similar in each transaction, though the price of the property can vary significantly.

In other words, you will many times work just as hard on a $250,000 home listing and sale process as you will a $600,000 deal. With that in mind, there is the possibility that one might reduce the percentage charged on the higher priced listing.

One business model is a tiered choice of two or three listing service packages. Generally, this involves taking out some marketing options to reduce the cost to the brokerage.

One strategy in this model is to structure the offerings such that they move the seller to the full service price anyway. The seller is shown choices, but ends up selecting an option close to full price because they don't want anything taken away from the marketing of their property. This isn't a negative statement, as sometimes just the display of the options helps to clarify to the seller the services and their associated costs.