Is sounds like it at first, but think about it for a second - not necessarily. When "full-service" agents talk about "discounters" they seem to think they might not be talking about some of their own. The DOJ suit against the NAR makes me think again about this. Michael Parker's post yesterday touches on it as well (more in the headline than the rambling text, though he makes great points anyway in assembling quotes from others).
Discounter means one that offers services (of some sort, we'll get to that) for a lower price than the norm. While it has become synonymous with the thought that the services being offered are less than that of the services the "full price" providers, that isn't implied in the name itself. Dollar General might be a discounter that offers lower end products, but Wal-Mart, also very much a discounter (the largest in the world) offers a range of quality that is quite high, often higher than most of the non-discounters (and other discounters) it seems to be putting out of business. After all, I can't say that getting apples at the Wal-Mart Neighborhood Grocery Store for less than Ralph's or Winn-Dixie or Dominicks means that I get only bruised and dried up apples at Wal-Mart. They are the same apples, they just cost less.
Enter the internet to the world of real estate home brokerage (I focus on homes because internet based models have not succeeded well in the giant corporate leasing world, though they have for smaller commercial space, commercial space in smaller markets, and commercial space for sale via LoopNet). Most REALTORS think of the discounters as Zillow, Redfin, BuySide, etc. By the way (before David from Zillow jumps in) if you think these are all the same, or even close, you'd better go onto their sites and compare what they really do. There are discounters that provide little or no services, and those that provide truly full service, they just charge less or offer rebates.
The internet is a wonderful, powerful tool. For anyone in almost every business in the world, it can be an enabler, and in many ways a cost-reducer. It has made more information available, cheaper, faster and better distributed than ever before. The realm of the REALTOR in part used to be the power of information that the market didn't know about, with agents walking around lugging large books of printouts for every listing in the area. This is long gone. Now the traditional agents want to keep getting paid the same general commissions they have been paid for years, while being able to better (and cheaper) market their listings (if a listing agent) and better (and again cheaper) find available homes to show (if a buyer's agent). If the cost of operating and performing ones job goes down, it is only a matter of time before the market forces step in and find people willing to make the same amount as before by passing on that operating cost savings to customers. Oftentimes I believe the people that do this are actually using this as an opportunity to make more money than they could before, because they weren't the top agents in the old model, but they see the chance to move in, offer services for less, and capture market share they couldn't get before. This does not, though, mean that discounters are all the lower-end, would-be-washed-out/couldn't-make-it-before agents. In fact some of them are the best agents around, those that saw the opportunity to make even better margins, and capture even greater market share, so they are the number one agents by an even bigger margin. Those are the true geniuses.
If you are a "traditional" agent and you think discount pricing must mean discount service, you'd better rethink that and look around. I believe you get what you pay for and I've never discounted my prices for that reason. I think it's a slippery slope that once you're on, you can't stop the sliding. Full service and discount are not mutually exclusive, though, by any means. If you are a full-price provider, to counter full-service discounters, you have to provide more-than-full-service if you want to justify more-than-discount pricing or better full service. Don't forget Wal-Mart. They provide just as much (or more) than the stores they replaced, and they do it for cheaper. There will always be a place, though, for the higher end (priced) boutiques. That doesn't mean that the boutiques will always have as big a market share, or a share of the same market.
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The cost of marketing a home hasn't gone donw, it has actually gone up. Sellers still want the traditional print advertising even though it isn't effective. We all know traditional advertising isn't a good us of advertising dollars but we do it anyway because that is what the customer wants. Now in addition to doing print advertising we need to advertise heavily on the internet, which can be rather costly.
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