The real estate industry is evolving, and discount brokerages are becoming an increasingly attractive option for both consumers and real estate professionals. However, despite their growing popularity, many misconceptions persist—particularly among agents and brokers who have spent years operating within the traditional commission model.
If you’re considering investing in a real estate franchise, you may be wondering whether a discount brokerage model can truly compete with full-commission firms. The reality is that discount brokerages are not about cutting corners; they are about creating a more efficient, scalable, and consumer-friendly approach to real estate. In this article, we’ll address some of the most common myths surrounding discount brokerages and show why this model is reshaping the industry.
Misconception #1: Discount Brokerages Offer Inferior Service
One of the biggest concerns real estate professionals have about discount brokerages is the idea that lower commissions must equate to lower service quality. This assumption is rooted in the belief that traditional full-commission agents provide a superior experience simply because they charge more. In reality, discount brokerages have found innovative ways to deliver the same (or even better) service while offering significant savings to clients.
Many discount brokerages operate with a leaner, technology-driven model that reduces overhead without compromising service. For example, automation, virtual transaction coordination, and streamlined marketing strategies allow agents to serve clients efficiently without unnecessary costs. Additionally, because discount brokerages often work with a higher volume of transactions, their agents gain extensive experience and expertise in handling deals quickly and effectively.
At the end of the day, service quality is determined by the professionalism and expertise of the agent—not the commission structure. A well-run discount brokerage ensures that sellers still receive top-notch marketing, negotiation expertise, and customer support, all while benefiting from a cost-saving model.
Misconception #2: Discount Brokerages Struggle to Attract Top Agents
A common belief is that only inexperienced or struggling agents gravitate toward discount brokerages because high-performing professionals would never accept lower commissions. However, this overlooks a key factor: the earning potential in a discount model is based on volume and efficiency, not just commission percentage.
Top agents are increasingly drawn to discount brokerages because they recognize the opportunity to close more deals and scale their business faster. Instead of chasing a handful of high-commission sales, agents working under a discount model can generate steady, reliable income through a higher number of transactions. With the right systems in place, they can sell more homes with less effort, making up for any reduction in commission per transaction.
Additionally, many discount brokerage franchises offer competitive commission splits, marketing support, and streamlined operational structures that free up agents to focus on selling rather than administrative tasks. The result? A business model that appeals to ambitious, growth-minded professionals who want to maximize their earnings while providing value to their clients.
Misconception #3: Sellers Receive Less Exposure for Their Listings
One of the most persistent myths about discount real estate brokerages is that lower commission rates result in less exposure for listings. Some agents argue that traditional brokerages provide superior marketing, while discount brokerages cut corners to compensate for their lower fees. In reality, this couldn’t be further from the truth.
Discount brokerages use the same tools and marketing strategies as traditional firms to maximize listing visibility. Homes listed through discount brokerages are placed on the Multiple Listing Service (MLS), ensuring they appear on major real estate websites like Zillow, Realtor.com, and Redfin. Additionally, many discount brokerages leverage digital marketing, social media advertising, and automated follow-up systems to attract buyers efficiently.
The key difference is that discount brokerages operate with a leaner business model, reducing unnecessary overhead without compromising the core services that get homes sold. Many sellers are drawn to this approach because they receive the same exposure and marketing benefits as they would with a traditional agent—without the hefty commission fees.
Misconception #4: Lower Commissions Mean Lower Profitability
Many real estate professionals assume that discount brokerages must struggle to stay profitable due to their lower commission rates. However, this misconception fails to account for the high-volume nature of the discount model, which allows these businesses to remain highly lucrative.
Traditional brokerages rely on high commission percentages to sustain profitability, often requiring agents to close a limited number of high-value transactions each year. In contrast, discount brokerages focus on efficiency and scalability. By attracting more sellers who want to save on commissions, these brokerages often experience a steady stream of listings, leading to higher overall transaction volume.
Additionally, discount brokerages typically have lower overhead costs. They streamline operations through technology, reduce unnecessary office expenses, and create more efficient workflows. This means that even with lower commission rates per transaction, the overall revenue generated through increased deal flow can surpass that of a traditional brokerage.
Ultimately, profitability in real estate is about smart business strategies—not just commission percentages. Many discount brokerage franchises have proven that with the right systems in place, lower commission models can be highly profitable for both the brokerage and its agents.
Misconception #5: Buyers and Sellers Don’t Trust Discount Brokerages
Some real estate professionals believe that consumers are hesitant to work with discount brokerages, fearing that lower fees mean lower quality service. However, consumer preferences have shifted significantly in recent years, with more buyers and sellers actively seeking cost-effective alternatives without sacrificing expertise.
The rise of online real estate platforms and digital marketing has made consumers more educated about their options. Many sellers are now aware that they don’t need to pay traditional commission rates to receive excellent service and widespread exposure. As long as they feel confident that their agent is knowledgeable, responsive, and committed to their success, they are more than willing to work with a discount brokerage.
Additionally, strong client testimonials and online reviews play a crucial role in building trust. Many discount brokerages have successfully built their reputations through positive word-of-mouth, proving that satisfied clients are more than willing to vouch for the value these businesses provide. By maintaining transparency and delivering excellent results, discount brokerages continue to earn the trust of buyers and sellers alike.
Conclusion
Discount real estate brokerages have challenged the traditional commission model, offering a more efficient and consumer-friendly approach to home buying and selling. Yet, misconceptions still persist—often based on outdated assumptions rather than actual industry trends.
The truth is that discount brokerages provide full-service experiences, attract top agents, maximize listing exposure, remain highly profitable, and earn consumer trust. As the real estate industry continues to evolve, professionals who embrace this model can position themselves for long-term success.
If you’re considering a real estate franchise and want to explore how the discount model can work for you, now is the time to take a closer look. 1 Percent Lists is leading the way in revolutionizing real estate—offering a proven, scalable business model for forward-thinking entrepreneurs.
Ready to learn more? Contact us today to explore franchise opportunities and see how you can thrive in the future of real estate.