Connecticut Real Estate Blog - Real Real Estate in CT

This year, I stayed away from Walmart after Thanksgiving - until yesterday.  I needed to pick up gift bags and rock salt.  What better place to go?  Despite going early in the morning, I couldn’t find a shopping cart.  Not a good sign of things to come.

I entered and the cheery greeter was yelling “Welcome to Walmart!” over the blasts of hot air by the doors.  I started my search for rock salt in the home area, then moved to the automotive, then the holiday area and then to the garden section outside.  No rock salt.  I stopped and asked the one Walmart associate, “Could you tell me where I could find rock salt or ice melt?”  She said, “It should be outside.” I told her that I already looked there and she shrugged her shoulders and said she didn’t think they had it then.

OK.  So, I start walking around again to find another associate.  Other than the guy sweeping the entry to the home and garden and the cashiers, I walked around for 10 minutes and couldn’t find anyone.  So, I don’t need rock salt that badly.  I go back to the holiday section, dig through the mound of gift bags to find the ones I want and head over to the cashiers.

I get into line and the woman immediately in front of me is yelling on her cellphone at a person I can only guess is her husband/boyfriend/ex.  The conversation is so enthralling, I pull a bag of M&Ms off the shelf and begin to eat them while watching her on the phone.  Who needs the movies when I have Walmart?

The woman in front of her literally has 500 items she’s buying.  I was in line for 20 minutes - thank god I grabbed some nourishment for the wait.

The moral of the story - I saved about 10 cents on each of the gift bags I bought but I wasted an hour trying to find the rock salt and standing in line to buy the gift bags.  I could have just gone to CVS and been done in 5 minutes and not wasted the gas.

Discount real estate brokerages are the Walmart version of real estate.  You may spend less. You may sell your house. You may get market value.  What are you getting for your money?

Discount Brokerage for Sellers

(Note:  I am only getting into the types of discount brokerages I have come across in Connecticut.  Redfin & Buyside, two discount brokers making headlines, do not operate in Connecticut.)

The number one reason people choose to sell their home with a discount broker is to save money so their main appeal is that they “list” (not all companies list homes in the MLS) homes for sale for less.  Just what is less?  Since there is no typical real estate commission, the amount varies.  The cost can be a flat-fee, a reduced commission or a rebate. I know of several that list homes for around $500.00 but it can also be 1-2% of the sales price to the seller’s brokerage.  But that does not include the commission to the buyer’s agent, around 2-3% nor may it include advertising, signage or a lockbox. 

Discount Brokerage for Buyers

There are also companies that provide either a reduced commission or a rebate to buyers at the closing.  But most companies don’t focus on buyers-they focus on sellers.  He who controls the listings makes all the money.  I don’t know of any company in CT that offers rebates to buyers.  I do know of agents who work with buyers who accept whatever the co-broke commission is in the MLS and do not set a fee in their buyer agency contract.  If the buyer wants to see a house that has a co-broke of 2% and wants to buy it, the buyer’s agent effectively is working for a reduced fee.  Other brokers may set the fee in advanced and agree to not take more than 2%, giving whatever is left over to the buyer. 

Buyer rebates are not illegal in Connecticut, per the interpretation of CT Real Estate Law.

How do you know what you’re getting for your money?

This all depends on the specific service you choose.  Here are some questions you want to ask BEFORE you sign a contract. These questions apply to all types of brokers and agents, whether you are asking for a discount commission or not.  And remember, ALL commissions are negotiable.

Sellers

• Who is responsible for taking pictures of the house and paying for the pictures?
• Will the pictures market my house in its best light?
• Who is responsible for advertising and marketing house?
• What type of advertising does agent/broker pay for?
• Will agent host any open houses?
• Who will receive calls about your house? And feedback?
• Who will schedule showings?
• Who pays for and puts the lockbox on your house?
• Who pays for and puts signage on  your property?
• Is the fee paid to the buyer’s agent competitive?  (If it’t 2%, forget about getting a lot of showings.)
• Will agent provide you with advice on how to stage your house so it sells faster and for more money?
• Who receives the offers? Who negotiates the offers?  Is it you or does a licensed Realtor? 
• Who determines the listing price? Is a CMA done?
• Does the listing agent preview competitive properties in the area to determine if your house is comparable or a better price and condition?
• Does the agent assemble all marketing materials such as buyer packets, school reports, presentations, energy costs, DVDs, etc?
• What type of on-line/e-mail marketing is done? 
• Does the agent network with other agents to promote house?
• Are you at a disadvantage listing the house with a discount brokerage?  What is the agent and/or office’s average days on market for homes sold?  How about list/sold ratio? How many listings do they take and then sell?  Does the agent/broker have a good reputation?  Will other agents show your property if it’s listed with a discount brokerage?
• Are references available?
• Is agent in good standing with State of Connecticut, National Association of Realtors & local Realtor board?

Buyers

Assuming the buyer is looking to sign a contract with a broker and not go unrepresented.

• Who will make calls to set appointment to view properties?
• Are you required to drive-by the property first before viewing it?
• Will you receive listings via e-mail or can you log into a database and search yourself?
• Will the agent make recommendations for houses to look at, even if you haven’t specifically requested it?
• Will the agent ever preview properties for me, to weed out houses I may not be interested in?
• Will agent direct you to potential problems with the property, such as outdated mechanicals, underground fuel tank or encroachments?
• Will agent research property records at town hall or does the buyer have to?
• Will agent direct you to resources where you can search crime statistics, school reports, environmental issues and possible changes to zoning and development?
• Will agent recommend pre-screened providers of related services such as attorneys, home inspectors, lenders and contractors?
• Will agent attend the inspection(s), closing and any other follow-up at the property?
• Will agent negotiate on your behalf? 
• Will agent provide you with ALL comparables in the market to reveal the true value?
• Will agent discuss with you all strategies for obtaining a lower price?
• Is the agent a buyer specialist, have significant experience with buyers or hold an ABR (a designation that requires agent to have served as a buyer agent for 6 or more transactions and attended specific buyer representation classes)?
• Are references available?
• Is agent in good standing with State of Connecticut, National Association of Realtors & local Realtor board?