Discount vs. Full Service Real Estate Brokerage-the Lowdown, the Illusion in Metairie,Kenner,River Ridge,Jefferson & New Orleans

Economics works in real estate brokerage just the same way that it functions in retailing, purchasing automobiles or any high end product or service. If my firm can deliver a high level of professional brokerage service and get your property SOLD at a lower net cost in terms of commission, why should you pay mega brokers more for service which at times is worth less ? Mega brokers want you to believe that the extra 1% or 2 % that you are charged in terms of commission is worth while and that a broker who does not adhere to rigid commission schedules is categorized as a discount broker and therefore is stigmatized  as being less competent and less efficient simply because you are being charged a lesser commission. If you are selling a $300,000 house and you are asked to pay several thousand dollars more you have a right to know what those several thousand additional dollars buys in terms of marketing. More than likely, you will ascertain that the additional cost of commission is not commensurate with whatever the additional marketing( if any) is supposed to deliver. At least you will then be able to make a rational decision and determine whether the perceived additional services are worth thousands of dollars more. The rationale behind higher commissions buying superior service is a self serving illusion and a distortion concocted by mega brokers in order to justify their desire for higher commissions - not necessarily a higher level of service ! Some mega brokers urge their associates to prevail upon sellers to purchase advertising contracts in order that their property receives adequate advertising exposure. At Larry Trunk,Inc. sellers are not asked to buy advertising contracts as all advertising is paid by the company and is considered a normal business expense and we make no effort to pass that expense off on our sellers. The controversy and discussion of full service verses discount brokerage promoted in some publications is once again in my opinion very misleading. How do you draw the line between one and the other ? The simple truth of the matter is that you can not. Some proponents of higher commissions are, interestingly enough, the first ones to haggle for better prices and bigger discounts when purchasing goods and services, particularly high end items. If it is economically desirable, honorable and wise to shop for the best prices for such things as automobiles then why does that same logic not apply to selection of a real estate brokerage based upon, among other considerations, commission rates ? If you negotiated the purchase price of a new car at a 24 % discount off list price would you be stigmatized and labeled as a discount shopper/consumer ? If you purchased real estate at a 14 % discount off the list price would you be cast condescendingly as a bargain hunter ? No-in both instances you would be admired and applauded for your business acumen and your negotiating skills.

What is truly remarkable is that in the realm of brokerage services, often, both superior service is received at a lesser commission and that higher commissions do not necessarily equate to a higher level or a more professional level of service. You, however, may very well be led to believe that such is the case. Analyze for yourself and determine whether higher commissions will get your property sold faster or will put more net dollars in your pocket at closing. Some mega brokers make an argument supporting that but I personally believe that labels such as full service means simply that you, the public, oftentimes pay more-for less ! The decision is yours and there are many options available in marketing real estate and the fact that competition( a basic principle of free enterprise) functions between brokers is most invaluable for you the property owner.

In conclusion, it is my opinion, that classifying brokers as full service or discount brokers is an exercise in futility. I categorically reject any effort to label brokerages as either full service or discount based solely upon the amount of commission charged. There are many factors which enter into the efficiency and professionalism of a brokerage the least of which may well be amount of commission charged. We negotiate commissions and we do render a consistently high level of professionalism in brokerage and our effort is neither increased nor decreased by commission amounts. We have been doing it the right way for over 33 years and will continue to do so, not contingent upon higher or lower commissions, but because you the public deserve the highest level of professional service which we can render !

The preceding article is subjective in nature and represents the opinion of author/ real

estate broker, Larry Trunk