Get Lower Commissions with Independent Brokerages

I read an article about more and more Realtors moving to non-franchise brokerages (aka independent brokerages). These are the brokerages that are local-only and don’t have a name Buyers recognize from outside our area. There are many independent brokerages in our sub-areas here on the Central Coast (North County, SLO, South County, North Coast) that aren’t known by people looking to move to another city on the Central Coast. Most of these brokerages have one office with a few agents.

The main reason that realtors are moving is to reduce costs since the market is slow. Some realtors are not making any sales and they need an inexpensive place to hang their license if they do get some business. Also, there are no franchise fees with independent brokerages so they get a higher commission split from the brokerage. What agents get at franchises like Century 21 is a brand name, nationwide advertising, training programs, corporate support, national website, etc. I see very few independent brokerages even advertising their company these days, a further signal that sales are slow and there are still too many Realtors trying to make a living.

If you list with an independent brokerage, I wouldn’t pay for something you are not getting. If you’d pay 3% to a Listing Agent from a name-brand brokerage, I would pay 2% to an independent agent. An independent Listing Agent will be making about the same. If you paid them 3%, they’d be making lots more than the listing agent from a name-brand brokerage and you would be getting less value. Just doesn’t make sense to me. There is a difference between brokerages you may consider to list your home. In an area where we get a lot of out-of-town Buyers, these differences can cost you.