Limited-Service Real Estate Agents Offer Less Value Than You Might Expect

Limited-service agents may not provide these services

You might be able to negotiate with a limited-service agent to handle more than just the MLS listing. However, generally, you’ll need to take on most of the tasks that a full-service agent would handle. These responsibilities include:

Staging services and remodeling advice

Real estate agents know what sells homes in your market. They advise clients on how to efficiently remodel and stage their home to add value to their home and attract buyers. Some full-service real estate agents provide staging for no additional fee.

A limited-service real estate agent won’t assist you with prepping your home for sale. You’ll need to research what styles are trending in your market and stage your home accordingly. Beware of over-improving your home before you list — this can quickly eat away your profit.

Pricing strategy

Full-service agents help sellers pinpoint the best listing price for their home. They conduct a comparative market analysis (CMA) to determine the home’s fair market value and suggest a pricing strategy to play the market in the seller’s favor.

Limited-service real estate agents typically won’t assist with pricing strategy due to the amount of work involved in crafting a rock-solid CMA. You’re on your own for pinpointing the best price.

You can begin your pricing research by using HomeLight’s Home Value Estimator. Next, review the sale prices of homes similar to yours in your neighborhood that sold in the past six months. Compare your home to these “comps” and adjust your price based on any differences. This process can be more challenging than it sounds.

Marketing

Besides providing you with a “for sale” sign, limited-service real estate agents won’t market your home. You’re in charge of hiring a professional photographer to take listing photos. You should also market your listing with digital and print advertisements, such as four-color flyers, direct-mail listing ads, video or virtual tours, and social media promotion.

Communication and showings

As we touched on earlier, a limited-service real estate agent does not communicate with buyers on their behalf. Your listing and signage must include your personal contact information so buyers and their agents can reach you directly. Respond to buyers’ calls and emails and arrange showings promptly, so you don’t lose them to the competition.

Negotiating

If a buyer asks for a price reduction or repair credits, you’re on your own to negotiate. Are you up to the task? Negotiating against a buyer’s agent who does this for a living can be a challenge. For instance, in 2023, 33% of buyers said their agent negotiated a lower price, and 46% said their agent got them better contract terms. And most of the sellers involved in these negotiations were represented by a listing agent.

When negotiating, keep your emotions in check. Know your bottom line — meaning the point at which you’re ready to walk away. Before doing so, make sure you have a BATNA — your Best Alternative to a Negotiated Agreement — which is your backup plan if the deal falls through.

Closing procedures and paperwork

There’s paperwork throughout the home-sale process, especially at closing. Navigating paperwork and legal processes proves difficult for many sellers who forgo a full-service agent.

And don’t expect your buyer’s agent to help you. Buyer’s agents can’t assist a self-representing seller in finalizing a transaction. If they do, they may be engaging in “dual agency,” which is illegal in some states. This dynamic can compromise an agent’s neutrality and challenge the agent’s confidentiality, both of which could unfairly affect the sale price.

Your best bet is to hire a real estate attorney to assist you with closing. Some states even require an attorney’s presence at closing, regardless of whether the seller and buyer are working with real estate agents.

Check your local laws on limited-service real estate agents

Some states have laws that set minimum service standards for limited-service real estate agents. For example, Illinois introduced a law in 2004 to ensure agents don’t leave clients feeling unsupported, requiring them to present and discuss all offers and counteroffers with sellers. Texas, Michigan, and Missouri have similar regulations in place.

In addition to these states, others like California and New York mandate that agents present all offers to sellers. Florida requires agents to handle specific tasks, including negotiating on behalf of clients, while New Jersey also has laws that outline essential services agents must provide.

Commission savings can come at a cost

The main benefit of choosing a limited-service real estate agent is the potential for savings — you won’t pay the full 5.8% commission. However, you might still need to cover the buyer’s agent’s commission. While you could save money by not hiring a full-service agent, there’s a trade-off.

So, even if you save 2.9% on commission, you might end up losing almost as much on the sale price. The savings might not be worth the extra work and the likely lower sale price.

Rogers asks you to consider what your time is worth. While he understands that some sellers might not need a full-service agent, he believes that for most sellers, hiring a professional to manage all aspects of the sale is a better choice.

For many sellers, navigating the complexities of a home sale can seem overwhelming, which is why 89% choose to work with a real estate agent. A professional can handle the details, negotiate effectively, and help you avoid common pitfalls, making the process smoother and potentially more profitable. While the savings of a limited-service agent might be tempting, the expertise and support of a full-service agent often make the investment worthwhile for a successful sale.

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