Is 2008 the Dead End For Limited Service Providers?

In the midst of a heated real estate market (as was the case from 2002 – 2005) some sellers sought an opportunity to ’save a few bucks’ and contracted with a limited service provider (formal term for a discount broker). Why does this happen in real estate?

Do people seek out a discount orthodontist, a discount heart surgeon, a discount attorney? The likelihood of that is pretty slim. But Sellers felt like they were in the driver’s seat during the recent real estate boom and some looked for a way to avoid commission dollars, even at the risk of improper protection or representation for their transaction. Perhaps they just didn’t understand the true value of a Realtor.

National statistics show that homes sold with a full service Realtor yield on average a 16% higher sales price*. That alone is well worth the cost of a fair commission. But now it’s nearly 2008, and with the market swinging to the tempered side (to say the least) and with enormous inventory levels, without a doubt it is the Buyers who are in the driver’s seat.

So, are the days of discount brokerage gone?

We’d like to hear from you on this topic.

Thank you for making me Your Orange County Real Estate Connection.

Best regards.
Michael Caruso, Broker ABR ABRM CRB CRS GRI
2007 President, Orange County Association of Realtors





* Statistic from N.A.R.