A discount real estate brokerage provides brokerage services at commissions below market. Often, discount brokerages focus on reduced rates for listing services. That said, many models also provide commission rebates for buyers as well.
Agents are involved in over 85% of real estate transactions. But this statistic includes discount brokerage deals. A growing share of discount brokerage business brings average commissions down.
The service offerings of discount brokerages are often similar to traditional brokerages’. But traditional brokerages would argue that discount brokerages cut corners to limit expenses.
Many discount brokerages hire agents as full-time employees. This ensures all clients get the same level of service regardless of the commission size. But there are plenty of discount brokerages that employ agents as independent contractors.
Redfin is the most well-known discount brokerage, offering a 1-2% listing fee service. It is also a tech-enabled brokerage, using technology to drive volume. Companies like Homie offer a flat fee service for home sales. Home also refunds a portion of fees for any client that buys a home with them.