The dispute in Denver pits discount-fee brokers — and their advocates — against traditional brokerages. Stephen Brobeck, executive director of the Consumer Federation of America and a longtime critic of real estate industry practices, says “the lack of disclosure of brokerage fees significantly increases consumers’ cost of purchasing a home.” Glenn Kelman, CEO of Redfin, a national realty firm with 54 offices in 29 states and the District of Columbia, charges 1.5 percent to list a home and rebates money to buyers, and he agrees that greater disclosure upfront is essential for today’s Internet-savvy consumers.
More traditional, full-fee brokers, including the major franchises and large independent firms, contend that they not only bring superior skills and service levels to their clients compared with discounters — expensive marketing campaigns, high-quality photography, staging, among others — but that their fees are negotiable and available to clients who ask about them. Frank B. LLosa, a broker at Frankly Realtors, an independent agency in Falls Church, Va., said in an interview that experienced buyer agents often save their clients thousands of dollars through negotiations with sellers and provide more hands-on help from start to finish in transactions than lower-cost competitors can afford.
Where do you come out in all this? First and foremost, be aware of the wide variety of options available to you as seller or buyer. Some brokerages charge clients a small fee to list them on the local MLS, but offer strictly limited other services. In California markets, for example, MLS Access offers to list houses for six months for a $75 fee. Other firms offer menus of services at flat fees. At the other end of the spectrum are the full-service brokerages that may quote a “standard” 6 percent commission but whose agents may be open to negotiating something less.
Check them all out, and ask a lot of questions — who does what and who gets what — if you truly want to negotiate a good deal.