Selling your home is an expensive endeavor. Therefore, making an attempt to save money in the process makes sense. But how much money will you REALLY save when you use an online brokerage, like Purple Bricks or Redfin?

Robert Rico is discussing a new kind of real estate broker. Here’s something you won’t learn in a real estate school.

You Can Save Money with an Online Brokerage – But At What Cost?

Sure – listing houses for sale with an online brokerage can help you save money. Instead of breaking off 6% of the sale with a traditional realtor, you could be spending around 1% with an online brokerage.

This small percentage change means monumental savings.

But, like any discount brokerage, you get what you pay for. Using an online brokerage could mean you lose the opportunity to work with a real estate agent.

In fact, online brokerages like Redfin and Purple Bricks are directly competing with the brokerages you see today. The reason being: saving money is great!

But, when you spend less, you may want to expect less. Real estate agents prefer higher commissions.

When a commission of 1% is split between the broker and real estate agent, the agent will be less likely to work with you.

Redfin and Purple Bricks home pages screenshot

Save More With An Online Brokerage

Sellers can undoubtedly save money using an online brokerage.

Compared to a brick and mortar brokerage, the amount of money that one can save is highly apparent. Companies like Redfin or Purple Bricks will charge the seller around 1% when selling their house.

If the value of the house is $1,000,000, then that’s only $10,000 spent for listing.

A traditional real estate agent will charge the seller 6% for selling the house. Taking the same property value, that’s $60,000.

With $50,000 at stake, making the decision of who will sell your house becomes pretty simple.

Online brokerages make selling and listing the home easy for the seller. They also make the service charge affordable.

This sounds too good to be true, right? Well, there’s one, large downfall that makes this great deal, not so great.

You Get What You Pay For

When you’re working with an online brokerage, you get what you pay for.

Paying a lower amount of money to sell and list your property will bring less buyers and a lower quality of buyer.

You don’t have the opportunity to filter the right person for your home. Additionally, buyer agents will not take interest in your property, because they’ll have to share the 1% commission.

The buyer’s agent will be deterred, because they don’t want to invest their time to split $10,000 with an online brokerage. They could be earning more money for themselves and client by working with traditional real estate agents.

As a result, online brokerages could make the selling process more challenging.

Real estate agents shaking hands while exchanging money

The Benefits of Using Traditional Real Estate Agents

When a traditional real estate agent charges the seller 6%, they’re committing to a promise of quality service. The agent will make the process of selling a home simple by finding valuable buyers for their client.

By paying the extra 5%, you are agreeing to hold the agent to a standard that will pay dividends when finding your buyer.

This means they will be working for the seller.

By looking out for your best interest, they will go above and beyond what an online brokerage is able to do. By meeting your needs and finding the right buyer for your home, your sellers agent will show you why the 6% service charge is necessary.

You can save money with an online brokerage, but it might cost you much more money down the line.


Every week, we release in-depth videos to help viewers become successful real estate agents on our CA Realty Training YouTube Channel. We also have videos of our free introduction to real estate videos available to watch.

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