2018 Real Estate Trends – Competing with the Discount Brokerage

Last Updated on April 5, 2018

We’re covering real estate TRENDS in this week’s article- check out the Swanepoel Trends Report for 2018 (CLICK HERE) for much more in-depth information and statistics. You’re going to want to know the top 10 things driving the real estate business this year! Today- it’s all about the Modern Discount Brokerage. Plus- you can get 10% off the Trends Report, ONLY here at Agent Inner- use the discount code “discount10” when ordering! (CLICK HERE) to order.


Technology has made agents’ jobs easier in many ways- it’s easier than ever to create online listings and post information to the MLS, easy to keep in touch with your sphere of influence, and much easier than it used to be to keep track of leads.

Along with things becoming easier for YOU, it’s also much easier for buyers and sellers to access real estate info on their own.

This means homebuyers are changing their approach to buying and selling real estate. The MAJORITY of buyers find their home online on their own. That’s setting the stage for the rise of the Modern Discount Brokerage (MDB). They offer real estate consumers:

  • Flat fees
  • Sophisticated online marketing
  • Virtual tour technology
  • Assembly-line service approach

Takeaway- what does this mean for me?

It looks like MDBs are going to grow in market share, which means-YEP, other real estate agents are going to have to pay attention to compete. And you have to know- you just can’t compete on price. There will always be another low-ball price out there, so discounting your services is really just a downward spiral. So how do you justify those comparatively higher prices?

Many agents are moving more toward labeling themselves, and working as, a specialized agent (one who works in specialized geographical areas, one who works especially with first-time buyers, VA loan buyers, etc.). It’s become more important than ever to:


What can you offer that’s special? Are you a professional with years of experience in an area? Do you offer services that stand out-and do you have the testimonials to prove it? Can you change your focus to showcase your specialty/niche? 

It’s time to start thinking of ways to set yourself apart from the cut-rate providers, and remind clients that sometimes, you get what you pay for.


 Share your knowledge, and your unique message to your prospective buyers and sellers.

  • Package your services. People always prefer to work with someone who specializes in an area. Make your offers specific to the market you’re working in. If you farm or mail something to an area, use the name of the area – for example, if you’re farming to the Mountain View neighborhood, call yourself the “Mountain View Specialist.” If you’re promoting a service to that area, name the service “The Mountain View MAXIMUM Home Value Audit.” It might be your standard CMA, but you’re making it specific to the neighborhood you’re offering it to AND you’re relaying a benefit (they’ll get the maximum home value!).
  • Niche marketing. Become the trusted authority in an area! Focus your marketing efforts on making sure prospects know you’re a professional, and that you have a specialty that they’re going to appreciate.  Read about Owning Your Niche
  • Generate word-of-mouth.
  • Work smarter. Systemize your processes and standardize the things you do each day to accomplish more and be more effective.
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What’s driving the discount brokerage trend?

MDBs have been around for a while- so what is it exactly that’s driving their major growth?

  1. Increased access of data and transparency in home buying and selling process (sites like Zillow)
  2. Ability for targeted marketing through Facebook and others
  3. Reduced operating costs driven by tech (remote teams, centralized operations
  4. Big-money investors


Snapshot: Three Players to Watch

In the US, there are 3 big MDB’s to pay attention to. We’re providing a brief overview of what makes them stand out, but for more details, the Swanepoel Trends Report for 2018 (CLICK HERE) has all the details.


All agents are licensed salaried employees allowing it to deliver train and hold agents accountable for delivering a higher level of consistent service. Compensation is directly tied to customer satisfaction surveys

  • Charge 1.5% in most markets (market-dependent minimum fee ranges $3,000 – $5,500)
  • Offers buyer rebate on average $3,500
  • Two classes of agents – lead and support.
  • Proprietary technology platform
  • In 2016 they did 26,000 units with only 763 lead agents. A traditional firm would have required 4 TIMES as many agents.



Launched in the UK 2014 – came to LA in 2017 after raising $62 million in a special stock offering. No US-based brick and mortar offices – all virtual.

  • Flat-fee based model averages $3,200.
  • Buyers receive  a $1,000 rebate on closing.
  • Agents are independent contractors who work company-generated leads based upon ZIP codes.
  • Buyers, sellers and agents all have access to the same dashboard. Encourages consumers to participate in finding their own home, making offers, negotiating price, showing and viewing homes
  • Aggressive brand marketing – promise to spend $2 million in  Los Angeles 2017 on TV/Radio focused on “real misery” as in “the real misery you feel when you pay too much in commision and get nothing more for your money”



Launched in 2013, Redefy works with buyers at traditional rates, and charges sellers a flat fee.

  • Sellers pay a fee of $3,000. Homes over a certain price carry a 1% commission.
  • No buyer rebate.
  • Agents are independent contractors, who receive flat fees for securing listings and closings. On buy-side deals, they collect traditional commissions which are split with the brokerage.
  • Redefy has its own in-house CRM, tracking everything agents do. The process is very efficient, as parties are all alerted as actions need to be taken, and the transaction moves smoothly through the system.
  • All incoming leads are routed through a centralized call center and assigned to the correct person in the first 30 seconds.
  • In 2017, the company began testing technology that allows clients to list their own homes with agent oversight.

Snapshot: Emerging companies

 You may hear about some of these companies this year:

  • Door, Inc. This full-service firm charges a flat fee for buyers and sellers, does handle paperwork for clients, but doesn’t offer open houses.
  • Homie. Homie is focused on automating the buy/sell process and provides even less service than other companies we’re mentioning. Sellers show and stage their own homes, and take the lead on negotiation.
  • Houwzer. Buyers pay traditional commission fees, and sellers pay a flat fee for full service. A tech-driven workflow helps streamline the process.
  • Trelora. Like most MDBs, each role in the company has been narrowed/focused. Some agents work as listing agents and only visit homes and suggest prices. It offers flat-fee seller and buyer services.


*** Canada Is NOT Immune to the Modern Discount Brokerage ***

Canadian real estate giant Brookfield Real Estate Services purchased Quebec based 700-agent Proprio Direct in June of 2017.

As a large MDB in the Canadian market, they offer cloud based services, no offices, and host their training/coaching and call centre virtually. The 50/50 split and this model is the most profitable in the Brookfield portfolio.

According to Phil Soper; Brookfield President and CEO, they worry about the sustainability and profitability of brokerages in smaller markets.


What do YOU think?

Do you work for a discount brokerage, or do you have an opinion you’d like to share? We’d love to hear from you- just leave us a comment below.


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