Summer Soldiers: The Reality of Discount Realty (Part 1)

Real Estate Agent with Big Block Realty 858.232.8722 CA BRE# 01261476

The Reality of Discount Realty




"These are the times that try men's souls: The summer soldier and the sunshine patriot will, in this crisis, shrink from the service of his country; but he that stands it now, deserves the love and thanks of man and woman." ~ Thomas Paine speaking of REALTORS®, the Winter Patriots!


Without fail, every boon real estate market will experience a boom in discount brokers. The phenomenon is always the same:

  1. Market shifts to a sellers’ market, misleading the public that it takes no skills or experience to sell a home, so why pay for it?
  2. We just put a sign on the lawn and pop it in the MLS and multiple offers roll in.
  3. If you think hiring a professional is expensive, wait ‘til you hire an amateur. That upfront savings can cost you thousands on the back end in lower sales prices or higher buyer concessions for sellers and poorly negotiated price and repairs for buyers.

It may have that appearance to the public and it’s that appearance these discount brokers prey on. Let’s examine something:

Where were these brokers during 2007-2011’s Great Depreciation, that caused over 300,000 agents to quit real estate in the United States alone? I know where I was; selling real estate Thomas J. Nelson Realtorand developing skills that were priceless and could only be learned in a distressed market. One that required, patience, focus, negotiating skills, marketing skills and emotional intelligence. ThisREALTOR® was here in real estate cleaning up the mess that all the fly-by-night discount brokers, lenders and other charlatans created, then bailed on.


Let’s look at some of what’s popped up (now that it’s “easy” to be in real estate) since the Great ’07-‘11 Recession/Depreciation.

Companies like REX Real Estate, Purple Bricks, RedFins and other members of “The Discount Buyer Beware Crew”


I’ll use REX for this example, but you can make similar arguments for any discount broker (although some do still use the MLS, REX does not). REX Real Estate boasts on their website, how they are not using the “traditional MLS” because the MLS causes you to pay 6% for your listing and “outrageous fees”.(FALSE) The MLS doesn not set broker fees, in fact listing agents do. All commissions are negotiable and transparent up front, and I wouldn’t hire any agent that can’t negotiate their own commission (or what does that say for what they’ll do for your money)? If they roll over on themselves that easily to get the gig, do you really think they'll defend your money to close the deal?


By the way, a 6% fee doesn't go to one agent. Typically 50% of that goes to the selling agent. Both listing agent and selling agent then have splits or fees with their broker, their MLS, their Board of Realtors, etc. They pay income taxes (28% in my case), reimburse the costs of closing that deal (yes we front hundreds to thousands of dollars on every deal and need to pay that back before we see dime one of profit) and running a business that lasts. We'll be here for you after your sale, in any market.


We work 10X harder in 2018 for 2/3 or less of what we used to earn in 2003. How would you like to hire on to a company that promises you more work and less pay and far less gratitude towards you for earning that pay?



Do your homework before you hire. Read The Fine Print!


33.33% of the reason you hire a REALTOR® is their ability to negotiate your deal. If you are a seller receiving multiple offers, it’s also to know how to vet out and negotiate up the best offer; which is not always the highest offer initially. No good agent, whether they are a REALTORS®, a sales agent, they work for Coldwell Banker, Big Block Realty or REX will put their commission ahead of their clients’ needs. But, yes, there are transactional agents out there in all companies that do, because it’s human nature. This includes REX and fixed fee companies like Purple Bricks.

REX is not using any technology any other REALTOR® has access to. We never “rely” on the MLS, which is why we use all the latest technology and tools available to market a home for sale. However, REALTOR® IS PUTTING YOUR HOME ON THE MLS: because there are over 800 MLSs across the United States which are potentially viewed by over 1,308,616 REALTORS® and almost that same number of licensed real estate agents (not all licensed agents are REALTORS®). Which means REX is denying you a hell of lot of marketing exposure under a claim that it’s to "save commission fees"-again-false.

Oh by the way, if it were not for the MLS, Zillow, Trulia, etc. would not have 95% of the inventory they showcase-because that’s where they get the majority of their inventory from-our listings!                                                                                      To Be Continued...





                            READ PART 2









Posted by

REALTOR®, CRS, RCS-D, CDPE, ePro, Certified:Military Home Specialist,

Certified: Luxury Home Specialist Podcast Host, Author & Keynote Speaker


Brokered by Big Block Realty

CA-BRE# 01261476, since 1999  (My Team)

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Disclaimer:  Nothing in this blog article is to be construed as legal advice, tax advice, medical advice or financial advice.  For legal advice see an attorney.   For tax advice, health or financial advice see a tax attorney, certified public accountant, or other qualified professional.

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Thomas J. Nelson, Realtor, ePRO, CRS, RCS-D

& Host of Postcards From Success Podcast
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