Question corner: Too good to be true? Might be a clue.
Houses sell themselves these days. Why shouldn't I use the cheapest broker I can find to sell my home?
A discount broker is like discount merchandise on the sale rack: cheap, but no bargain.
That's the problem with choosing an agent—or any service provider—solely by what he or she charges.
It assumes that all agents offer the same level of service. That loud bang you just heard is wishful thinking colliding head on with reality. Whatever line of work you're in, you know that only a few of the people in it are outstanding. Many just muddle through, and some are so bad they barely hang on by their fingertips.
It's the same with real estate agents. Yet sellers looking for a "bargain" agent entrust the sale of their biggest asset to someone who has to take a pay cut to stay in business. That doesn't say much for his job skills, but it does say plenty about his job skills.
Home do sell for lots of money these days, but relatively few sell for what they could. Outstanding agents make money for their sellers by taking the time and effort to make sure your house looks its best at the least cost. Marginal agents don't just give their own money away; they also give your money away by skipping the time-consuming details that make your house a "hot property". Often they don't know how it's done or can't be bothered. That's why they can't charge as much, but with today's high prices, the difference between "hot property" and "not hot" can cost a seller tens or even hundreds of thousands of dollars.
So what's wrong with getting a little less money for your house if you pay less commission? Agents don't just sell your house these days. Years of pro-buyer legislation and court decisions have made the sale of your home a transaction rife with legal liability. Your agent is—or should be—your guide through this legal minefield. Marginal agents aren't up to the job.
The boom market of the past few years hasn't made the good agent's job easier, it's just changed his or her emphasis. How? To get a home now, competing buyers go far out on a limb. They strip their offers of the usual buyer protection clauses, then go deep into debt to pay mind-bending prices for modest homes with alarming inspection reports—knowing all the while that there's no guarantee the home will be worth what they paid for it in a year or two.
With this kind of pressure, buyers are far less inclined to shrug off the mistakes that ill-advised sellers and marginal agents can so easily make in such a complex transaction. A good agent minimizes the risk to everyone, scouting ahead for the red flags, the undisclosed defects, and the missing or carelessly completed documents that can have a buyer bailing out of escrow or calling an attorney after it closes.
And a good agent doesn't have to sell his or her services at a discount.