Austin TX Real Estate - Hill Country Austin Lakeway Homes for Sale: In Search of a Better Deal- Limited verse Full Service

In Search of a Better Deal- Limited verse Full Service

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

Comment balloon 39 commentsDonna Harris • November 27 2006 04:30PM


Donna, Pretty funny you give them that info and they still ask for a discount. That cracked me up. Maybe they think they are the exception to the rule. Oh well, hope you don't give it to them.
Posted by Bryant Tutas, Selling Florida one home at a time (Tutas Towne Realty, Inc and Garden Views Realty, LLC) about 14 years ago

Bravo!!!  :clapping:

I read your post in the forums about how you lost an AR lead to a discounter.  Back in Feb I lost 2 listings total $1 million from an investor to a discounter.  The listings expired, the market inventory exploded during that time and now that investor is stuck even if he is willing to pay someone full price.

He found me in a RE magazine and begged and plead for me to take it at a discount.  He said if I worked for a 100% office that I would "be able" to discount.  That really offended me because he doesn't understand or even know what kind of "split" I am on.

The moral of the story is:  It's a Karma Thang when they don't want to listen to you because you get what you pay for!!

Posted by Renée Donohue~Home Photography, Western Michigan Real Estate Photographer (Savvy Home Pix) about 14 years ago

Sellers get a discount (minimal) for one thing, buying their new home with me as well.  If they are not buying at the same time, full listing on the sale, and a credit for that minimal discount back when they buy.

I also offer to purchase the home warranty up to $400 for the buyers if the they give me 7 names and valid email addresses prior to closing.  Many take me up on that, but you would be surprised how many bogus email addresses I've been given!

Other than that, NO DISCOUNT!!  I'm a full service, full listing REALTOR® who is trying to run a business and I cannot run a business if I don't make any money!! 

Posted by Donna Harris, Realtor,Mediator,Ombudsman,Property Tax Arbitrator (Donna Homes, powered by JPAR - about 14 years ago

Excellent post, Donna. It ain't called limited service for nothing.

I have been writing a series on ActiveRain directed at FSBOs and probably need to throw in some calculations too. They think they are saving the commission, but on average FSBOs sell for 10%  or less than a REALTOR-listed home, so they are really not making out financially, even with a hefty commission.

Posted by Jeff Dowler, CRS, The Southern California Relocation Dude (eXp Realty of California, Inc.) about 14 years ago

Jeff,  I thought NAR acually published that the difference is 16% less for FSBO.  I haven't looked recently, but I think the numbers are something like a national average of $227k for a regular listing and $196k for a FSBO.  Definitely double check that before pounding it into a FSBO head, but I'm fairly certain the number is about 16%.  That 16% probably doesn't even take into consideration the longer days on the market for not being listed in a local MLS.

Posted by Donna Harris, Realtor,Mediator,Ombudsman,Property Tax Arbitrator (Donna Homes, powered by JPAR - about 14 years ago

Some people just flat out don't get it! 

How about this - po-tay-to versus po-taw-toe and to-may-to versus to-maw-to ?

Good post, Donna!

Ann Cummings


Posted by Ann Cummings, Portsmouth NH Real Estate Preferrable Agent (RE/MAX Shoreline - NH and Maine) about 14 years ago

Well - you can't blame you for being prepared.....or them for trying:-)  You are doing the right thing though, by putting it into perspective.


Posted by Deb Salkeld, Your Real Estate Virtual Assistant (Diversified Data Solutions, L.L.C.) about 14 years ago
This is the kind of information I wish I could stuff in some FSBO's faces and gloatingly scream "I told you so!" However, it's almost as satisfying to just look at them mockingly when I remind them in a consoling manner. "I told you so!". Thanks for this post!
Posted by Michael S. Mackey, REALTOR ABR, CRS, GRI, RSPS (CENTURY 21 All Islands) about 14 years ago
so nice to have stats to back up what we already know!
Posted by Leigh Brown, CEO, Dream Maker - Charlotte, NC (Leigh Brown & Associates, RE/MAX Executive) about 14 years ago

When you act in this most professional & educational manner to inform your prospect and they still ask for a discount? That is what decides for you not to do business with them! Been there, done that,
Great Tool, Donna...keep it going. 

Posted by Jerold and Terry Smith, Plano Texas Real Estate (Common name, Uncommon service - Smith & Smith Realty, LLC ) about 14 years ago
Very interesting statistics!  I would love to see the #'s for many markets, not just DFW!
Posted by Kaushik Sirkar (Call Realty, Inc.) about 14 years ago

Donna-  Great Blog !!  Very informative !!


Posted by Lauren Corna, Broker (Archway Realty, LLC) about 14 years ago

Great post Donna - and the article you refernece is excellent as well. I think I will put a few in my presentation book! :)

Read it here 

Posted by Carl Guild, Central Connecticut Real Estate (Carl Guild & Associates) about 14 years ago

Donna, You might want to read this post:                           What would YOUR sign read?

Good post! Congratulations on the well deserved gold star!!


Posted by Margaret Rome Baltimore 410-530-2400, Sell Your Home With Margaret Rome ( HomeRome Realty 410-530-2400) about 14 years ago

Donna- Thank you for touching on this subject. An agent deserves to get paid well. I believe discounts lead to discounted service.

Posted by Rebekah Peters (Exit Realty Tri-County) about 14 years ago

I am very good at what I do. 

I charge more.

I will make you money.

Posted by Randy L. Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) about 14 years ago
Donna - I've seen statistics on Unrepresented Sellers and Limited Service, but not the ones related to time in the business. Do you have a link to the article?
Posted by Sharon Simms, St. Petersburg FL - CRS CIPS CLHMS RSPS (Coastal Properties Group International - Christie's International) about 14 years ago

The article link was posted in one of the comments above, but I went ahead and modified the blog to put the link in it as well.

By the way, the article also says that "properties listed by Brokers sold for 0.8 percent LESS than those listed by Salespersons, and with a slightly longer marketing time"... 

Just another reason not to spend the 900 hours to get my broker's license!!  I'm fine as a salesperson!!

Posted by Donna Harris, Realtor,Mediator,Ombudsman,Property Tax Arbitrator (Donna Homes, powered by JPAR - about 14 years ago

Love this. I'm going to be using this one -- minus 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. -- of course. Since I've only been in the business about 6 months. :-)


Posted by Toby Boyce, MBA, Delaware Ohio (C.G. Boyce Real Estate Co.) about 14 years ago
These are some excellent points/ stats. However, I wonder if Sellers, in the heat of figuring out their bottom line, will really understand this... It all boils down to "education" - educating, really educating the consumer, yes?
Posted by Derek and Mariana Wagner, The Artisan Group - Colorado Springs REALTORS® (The Artisan Group- Keller Williams Premier Realty ) about 14 years ago

Great post! Which do you think has a greater impact Limited versus Full representation or experience of the agent that effects sale price versus list price?  An experienced full service agent will most likely get the seller to price their house closer to market price.  Whereas a less experienced agent (full or limit service) will take a listing at a higher price, so it sets on the market longer.  My only other comment on limited and full representation listings. The study can't factor in some of the other reasons for a seller may select a limited rep listing over full rep: 1. They have little or no equity built up to pay for a full service listing and the lack of agent experience to try to possibly negotiate a short sale. 2. The owner knows it all and thinks their home is worth more. 3.  They could be cheap.  


Posted by Steve Lauver, Omaha Realty -- 402-689-7550 (Nebraska Realty -) about 14 years ago
Great post Donna.  When they ask for the discount again, what is your reply?  Do you ever cave in?
Posted by Keith Jeppson - Salt Lake City Real Estate (Everest Realty Group) about 14 years ago
Awesome post Donna, limited service, limited profit!
Posted by Chris Tesch, College Station, Texas Real Estate (RE/MAX Bryan-College Station) about 14 years ago
Donna - So what you are saying is - Mr. & Mrs. Seller - due to my experience and level of service I can get you the most amount of money in the least amount of time for your home - won't that be great? :-)
Posted by Suzanne Marriott, Associate Broker, CLHMS, e-PRO (Keller Williams Arizona Realty) about 14 years ago

Keith, when I'm at the appt, they always smile and nod and tell me how much it makes sense.  I don't get to defend not taking a discount because since I've started presenting this report, they haven't asked... BUT, when I call to follow up about getting the house on the market, they tell me they chose someone willing to list higher and take a reduction.  Or, I'll see it listed in the MLS at a higher price and with a known discount company.

The couple of times I had been asked about a discount without presenting the report, no, I don't cave in.  I ask them what part of my marketing and advertising they didn't like and which things they would like omitted because when I do a listing, I fully market and advertise.  The sellers that actually have asked for a discount and allowed me to explain, are listings that I typically DO get.  Very odd.

Suzanne and Chris, right on the money!!

Posted by Donna Harris, Realtor,Mediator,Ombudsman,Property Tax Arbitrator (Donna Homes, powered by JPAR - about 14 years ago


These limited offices are popping up like gangbusters here in the midwest.  Your comments will help me deal with this issue more informatively.

Posted by John Hruska (Homes Charlotte, LLC) about 14 years ago

Hey Donna!


Remember me?  This was a well thought out article but here on the East Coast, the amount of competition is staggering.  I think that the average Seller in our area personally knows or is related to six Realtors.  Ugh!!!  But it was nice to see you got onto the Dashboard.  I'm stiving to do the same some time in the future.


Lisa Hammerstein

Posted by Robert and Lisa Hammerstein -201-315-8618, Bergen County NJ Real Estate (Christie's International Real Estate ) about 14 years ago

FSBO = has a fool for a realtor


Posted by Tom Burris, Texas/Louisiana Mortgage Pro - 13 YRS Experience (NMLS# 335055) about 14 years ago
Hey Lisa!  Of course I remember you... just keep writing about things that interest you and I'm sure you'll get on the dashboard too... just don't write about the weather.  You won't get anywhere writing about the weather... lol... you would have had to been around during the summer to understand that, but with all those days over 100 in Dallas, I wrote a lot of weather blogs that no body cared about.
Posted by Donna Harris, Realtor,Mediator,Ombudsman,Property Tax Arbitrator (Donna Homes, powered by JPAR - about 14 years ago

Thanks Donna!

There are so many things to write about that it's hard chosing just one.



Posted by Robert and Lisa Hammerstein -201-315-8618, Bergen County NJ Real Estate (Christie's International Real Estate ) about 14 years ago
People don't realize all the work that a good Real Estate Agent puts into a selling a home, you get what you pay for. If you want a discount agent you will get limited results and marketing. It's the same thing from my end, people have no idea how much time is put into getting loans funded and closed, some LO's will work on a deal for 3-4 weeks for $200 since they cut everyone elses rate just to get a deal. I rather go flip burgers for $8/hr then work for 2 weeks for $200.00
Posted by Leo Namiot, Before you chose a lender check my rates and fees (Canopy Mortgage) almost 14 years ago
Nothing is free, anymore.  For example, I grew up going to the recreation center during the summers and after school for different activities.  My brother and I would ride our bikes there, and it was free.  I just joined the local recreation center just one city north of the other rec center I went to, and I had to pay $65 to join!!  AND kids can't just be dropped off unless they're older than 15!!  I have no idea what we would have done if we didn't have the FREE rec center to go to growing up.
Posted by Donna Harris, Realtor,Mediator,Ombudsman,Property Tax Arbitrator (Donna Homes, powered by JPAR - almost 14 years ago
I feel like I should throw in one important fact about limited service listings.  Buyers agents, I hope you are ready to act as a dual agent and still only get paid for one side.  Sure, you are showing the fsbo home or limited service home, whatever you want to call it, its all the same, because they are paying a commission just like a traditional listing.  These homeowners have no realtor, just a MLS listing, thats it.  So now what?  Who do they come to with questions after you have a ratified contract?  They come to you!!  You are now answering their questions and phone calls daily until the closing date, and at the same you are trying to focus on your clients needs.  Now you, as the only realtor in this deal, are mad at the realtor who took this limited service listing to begin with.  Most of the realtors who take these discount listings are new and don't know better.  They don't know that you are upset to be working both sides and only getting paid for one, they don't realize they are hurting their reputation (as far as other realtors are concerned).  They just know they are new in the business and need listings.  They are getting a sign in a yard, learning how to write contracts, how to talk to people, but all at your expense!!!   
Posted by Eva Black (Palmetto Real Estate Co.) over 13 years ago


I understand what you're saying completely.  However, last year, the state of Texas passed a law about limited service brokerages and the listing agent MUST answer questions for their seller.  Since this has come into play, it's easy to tell the seller that they must contact their agent for any questions they have.

Granted, when I bought my first house, I was dealing directly with the seller and I feel I got a much better deal dealing directly with him rather than giving him the opportunity to bounce scenarios off his agent's head.  Taking advantage?  Nah, he started it!

Posted by Donna Harris, Realtor,Mediator,Ombudsman,Property Tax Arbitrator (Donna Homes, powered by JPAR - over 13 years ago
Donna: Another great post from you. I crunched real hard each time I have to speak to an Owner who has to fend for himself. I really dont think it's justice (full service or not) I dont think I can ever have my name associated to letting my clients have to defend themselves (even if I was crazy enough to give a huge discount on the listing). At the same time, some bad realtors have given the rest a very bad name. There is no winning here. There will always be someone who wants a discount. I think that's just being a consumer.

I think the stastistics also show that listings with realtors sell 17% more than FSBO.

Eva: You are right about needing to do the work of the other realtor. Ahhhhh....... I shake my head. But sometimes we got to do what we got to do.
Posted by Loreena and Michael Yeo, Real Estate Agents (3:16 team REALTY ~ Locally-owned Prosper TX Real Estate Co.) over 13 years ago

Hello Donna its been a while, I thought this was a wonderful post, Would you be ok with the idea of me using some of this info in my presentions


Posted by Daniel Lowery, e-PRO, Broker - Owner (1st Choice Real Estate) over 13 years ago

Hi Daniel,

It's a published article so go ahead and use it.  Keep in the mind that the actual study was done in the Dallas/Ft Worth area, but the overall logic of the information should be valid just about anywhere.  The link for the full article is at the bottom of the blog post, so just print it out.  Good luck using it! As I had mentioned, even when I point this stuff out, they still ask for discounts...

Posted by Donna Harris, Realtor,Mediator,Ombudsman,Property Tax Arbitrator (Donna Homes, powered by JPAR - over 13 years ago
Nice post!!! Some people just don't get it. They think they do but they really don't. The limited service providers have done the job of marketing themselves. We just have to better educate them. Unfortunately, we will never change them all. Some have to see for themselves they are really hurting their cause! Your post is very well stated!!
Posted by Rick and Lynn Orze, Carol Stream, IL RE/MAX All Pro (RE/MAX All Pro) over 13 years ago
Thank you, Rick and Lynn.  The great thing is in my market is that I've worked with buyers that when they see the discounter signs in yards, they don't want to see the houses.  They think that if the seller isn't even willing to pay for a full service listing, that they're going to be hard to deal with on negotiations and getting to closing.  Some buyers are smarter than you think!  It's amazed me a few times.
Posted by Donna Harris, Realtor,Mediator,Ombudsman,Property Tax Arbitrator (Donna Homes, powered by JPAR - over 13 years ago