There have been many debates over the years about the differences of Limited Service agents compared to Full Service agents. Many Limited Fee agents like to consider themselves Full Service, but potato, tomato (I don't know how to type the different pronounciation)
There is an article that I have included in my listing presentations since it came out last January. It's called In Search of a Better Deal: Effects of Limited Representation and Agent Experience. This is a great article and I thought I would quote some fabulous statistics it found. The main reason I present this report to my sellers is because it actually took place in the Dallas/Ft. Worth market. The study tracked over 55,000 residential transactions. The overall average of the study showed the listings to be on the market 90 days with an average sales price of $175,270.
"Limited service listings sold 1.7 percent less than typical exclusive-right-to-sell listings and took 17.1 percent longer to sell". With these numbers, "there does not appear to be any net gain to sellers using limited service representation."
Let's put that into real numbers. Let's say there is a house that sells for $200,000 in 60 days with a full service REALTOR®, like me. The above statistics would show this same house, with a limited service brokerage, would sell for $196,600 in 70.26 days. So, the seller "tried" to save 2% on the listing commission... did he succeed?? NO!
The difference in price is $3400. 2% of $196,600 is $3932. Then you need to calculate those extra 10.26 days on the market. What are your taxes per day? Let's say taxes are about $5600 a year which would be about $15.56 a day. Home Owner's Insurance can be estimated at about $5 per day ($1800 yearly coverage). Taxes and Insurance for the additional 17.1% marketing time is $210.95.
So, in all actuality, you didn't save 2% of the commission with a limited service brokerage. What you saved was $321.05. Is it really worth $321 to schedule all your own appointments; to be home for each and every showing to let them in the house; to sit on the market an extra 10 days; to call for feedback; or to negotiate your own contract instead of having the help of a professional? What is your time worth to you?
Other interesting findings were, "Sellers using listing agents with less than two years of experience received 1.1 percent less for a house compared with sellers who used agents with two to five years of experience, and the marketing time was 1.9 percent longer." "If the listing agent had more than fives years of experience [that's me as I'm in my seventh year], the seller received 0.8 percent more than sellers who used agents with two to five years of experience, and the property sold 1.5 percent faster."
As I mentioned, this is a great article and I include it in all my presentations, the seller's smile and nod, and they still ask for a discount... WHAT??
*Tierra Grande by James Ford and Ron Rutherford; January 2006