How Discount Real Estate Brokers Work

discount real estate brokers

Discount real estate broker breakdown

Low rates are the main focus of discount real estate brokers. Many discount brokers offer a built-in commission savings of 20-30% when listing with a traditional brokerage or realtor.

You will need to learn how real estate commissions work to understand how they can save you money.

One study found that the median income for an real estate agent in the United States is $42,246, with the highest-earning agents earning up to $64,198. This income comes primarily from commission fees.

The seller pays the commission fee in a traditional real estate transaction. Or, more precisely, it is taken from the seller’s proceeds at closing.

The average commission rate of 5.45% is made up of two separate fees per agent involved in the sale.

  • The listing agent receives the fee to market the property and helps it sell.
  • For bringing their client to buy the home, the buyer’s agent’s fee is paid to them.

The commission is usually split between the two agents. In this case, each agent would make approximately 2.7%.

Traditional commission breakdown

Listing fee2.7%
Agent fee for the buyer2.7%
Total commission5.45%

Discount brokers often offer discounts on the listing fees side of the equation. For example, a discount broker might charge a 1% listing fee instead of the 2.5-3% standard, which would lower the total commission to approximately 3.7%.

Discount commission breakdown

Reduced listing fee1%
Agent fee for the buyer2.7%
Total commission3.7%
Real Estate Commission

Notice: Buyer’s agent fees are around 2.5-3 percent

Discount brokerages, and traditional agents, for that matter, will advise you to pay the full buyer’s agent fees. The rates vary depending on the market but are generally 2.5-3 percent nationwide.

Why is it so essential to offer a full buyer agent commission? It encourages other agents to sell your home to clients. This is your best chance to find a qualified buyer quickly and get the best price for your home.

How can discount brokers in real estate charge lower fees

Discount brokerages often have pricing and service models that provide real value to their customers.

An example is a company that saves money by solving big problems for traditional agents and generates steady business volume.

Even the most successful realtors can spend a lot of money marketing. This allows them to meet new clients with no upfront costs. They can charge a fraction of the typical commission fee to your agent and pass these savings onto you.

These discount brokers need to be more efficient than traditional brokerages to offer lower rates and remain profitable. Each company approaches this differently, but the majority of them use some combination of these:

  1. Attracting new customers with less-expensive initiatives
  2. A smaller team handling a greater volume of customers.
  3. Upsell existing customers to other in-house services (loan title, insurance).

It’s not surprising that some strategies are more successful than others. Understanding the business model and the risks involved in discount brokerage is important. Check out these real estate trends to help get a better understanding of how

Five common drawbacks of discount brokerages in real estate

  1. Hidden fees
  2. Upfront fees
  3. Minimum fees
  4. Cancellation fees
  5. Commission for the Buyer’s Agent

If you are considering hiring a discount brokerage or agent for real estate, shop around and compare several options to ensure you get the best value for your needs.

The bottom line: Should you use discount brokers?

A discount broker is a good option for most home sellers. Brands like Change Realty provide great customer service and big savings. We recommend discount brokers because they offer a similar experience as working with traditional realtors. This makes them an excellent choice for most people.

Nevertheless, there are some discount brands that you should not consider. Companies that offer fewer services and less support than traditional realtors should be avoided. Although these “limited-service” brands may advertise low rates, you will be faced with risky service compromises that could limit your savings.

Home Prices at an All Time High in Wilmington NC

real estate statistics

The Wilmington Real Estate Market

real estate statistics
real estate statistics

With 2017 being a great year for Wilmington real estate, we thought it would be a great time to give a quick recap of some year end statistics on the Wilmington real estate market.  Although we offer ongoing, very detailed Wilmington Market Statistics that can be viewed at any time, those stats are updated every Monday and do not look at the full year. In addition, because many real estate statistics can be confusing, below we provide a quick explanation of what is being measured and the effect on the marketplace.


Available Inventory in Wilmington NC


One of the most commonly referred to real estate statistics is the Available Inventory.  The reason this real estate metrics is relied on so heavily is it’s a good barometer of the overall supply and demand for housing for a specific area.  

When the available inventory is low, that generally dictates a high demand for homes for sale.  A “balanced market” generally has between 5 and 7 months of available inventory.  To truly understand how long it takes to “sell through” the current inventory – you need to look at the rate of sales per month.  When available inventory is looked at by the “months it would take to sell through” that is referred to as “Absorption Rate”.  What that means is if no new properties were to be listed, it would take between 5 and 7 months to sell through the current inventory at the current rate of sales.  


When Reviewing the Absorption Rate – The Current Available Inventory for Wilmington Is Around 3 Months.


The inventory of available homes in Wilmington NC is at a 10-year low, and that is pushing home prices up and driving a sellers market.  Many people are under the impression that when we see a “sellers market” that means it is not a good time to buy….that is not always the case!


When purchasing a home in a seller market, although the home prices are rising, that means that you are buying into growing real estate market.  In addition, with mortgage interest rates still historically very low, but anticipated to rise over 2018; buying a home in Wilmington right now may be the most cost effective decision for buying a home.  


For instance, on a $350,000 home, if the mortgage interest rate goes up by 1%, your monthly payment would increase by approximately $200 per month.  That $200 per month represents a $40,000 difference in the sales price of the home! 

Needless to say, these are very rough estimates and many factors affect your monthly payment; but we did want to give an idea of the effect of interest rates and how that directly correlates to the sales price of the home you are purchasing.  

How Many Homes Were Sold?


Overall there were nearly 5,000 homes that were sold in New Hanover County in 2017. This is rapidly approaching breaking the record of 6,500 homes that were sold at the top of the last housing bubble in 2005. Inventory of available homes hovered around 3,000 a decade ago, but has since dwindled and in 2017, the average monthly inventory was 1,576.

This means higher demand with less inventory for buyers to choose from. Wilmington’s Hanover County is the second-smallest county in North Carolina by land area, the effect is pushing home values up and making it much easier for those looking to sell their homes quickly.

The best REALTORS in Wilmington agree that the inventory in New Hanover County is low and people are having a harder time finding a home to buy.  This could drive potential home buyers to start looking in Pender and Brunswick counties with more homes to choose from.

Average homes for sale in Wilmington inventory over the years:

available home supply for wilmington
available home supply for wilmington


Source: National Association of Realtors (NAR)

Although a tight market for buyers, the trend is definitely good for anyone looking to put their house on the market. There were many years when Wilmington was a buyers market but, the tables have turned and seller’s are now the ones benefiting.


2016 Census Information on Homes in Wilmington NC

housing inventory for New Hanover County
housing inventory for New Hanover County

New Hanover County


Historic New Hanover County is located at the southern tip of North Carolina. The county is bordered by 31 miles of beautiful Atlantic shoreline on one side and the tranquil Cape Fear River on the other. New Hanover is fastest growing county in North Carolina.


Minutes from some of North Carolina’s most beautiful beaches, Wilmington boasts one of the state’s largest historic districts with 230 blocks of homes and a downtown business district with a thriving arts community and hosting a plethora of restaurants, shops, museums and tourist attractions.


The historic downtown area of Wilmington continues to grow with the expansion of the business district and the new convention center and marina as well as state-of-the-art medical facilities and headquarters to a growing list of corporate entities. The University of North Carolina at Wilmington, as well as the Cape Fear Community College and Miller-Motte Technical College are also all located within the county.

Adding to it’s appeal, Wilmington is surrounded by island communities such as Carolina Beach, Kure Beach, Fort Fisher, and Wrightsville Beach each of these island communities offer pristine sandy beaches and a variety of activities for nature lovers, anglers, mariners, and water sports enthusiasts. The boardwalks, piers, and marinas these communities offer reflect the spirit of coastal America.


Learn more about work, travel, education, medical facilities, lifestyle, leisure, retirement and real estate in the City of Wilmington, New Hanover County, North Carolina.