What is a discount broker

According to Webster's New Collegiate Dictionary, "discount" is defined as "a reduction made from a regular or list price". Therefore, if Webster were to define a "discount" real estate broker, presumable he would be one who charges a lesser price than the "regular" or "list" price. In competition, a "discount broker" is often painted as someone who provides an inferior service and should be avoided by consumers but competition has changed all of that.

Times are changing and that affects real estate big time. Today we're seeing a proliferation of discount and fee-for-service brokers. Most company's say they will provide nearly all the services that a listing broker usually does, including putting a sign in your yard, advertising your property, dealing with prospects and handling all the paperwork.

But it's very important to list your home on the Multiple Listing Service that brokers use as a clearinghouse. Listing your property on the MLS usually 2.5%, the typical buyer's broker's fee. (This portion of the discount broker's fee goes to the agent who finds a buyer for your home.) So for the full-service treatment from one of these brokers, the fee is still around 4%. Of course, this is a significant discount from the 5%, 6% or 7% that traditional agents charge.