When it was time for local Amita Nathwani to sell her Animas View Drive home, she knew she had enough realty expertise to forego the traditional broker route, and it wound up saving her close to $10,000.
When it’s time to buy or sell a house, a real estate agent’s services are not necessarily the most practical option for some property owners. When a full-service broker is unwarranted, customers such as Nathwani may find a less expensive choice in limited-service brokers.
“I wanted to be able to have a little more control over what my selling price was going to be,” Nathwani said. “I felt like I was pretty knowledgeable myself about the market and what I was looking for. I wanted to see what would happen if I just listed it for the price I wanted to and make that judgment call.”
As the term suggests, a limited-service broker provides fewer services than a traditional agent. The package typically includes placing the house in a listing database and offering limited realty advice in exchange for an established fee that is collected whether the property sells or not. It’s not for everyone, and in La Plata County, the service is scarce.
Because the Colorado Division of Real Estate does not track limited-service brokers, the department could not provide an exact number of how many serve the region. Julie Meadows is one of La Plata County’s few limited-service brokers.
Meadows formerly was a broker with RE/MAX of Cherry Creek and has worked in Durango since 2007. She owns La Plata Realty. “I just didn’t want to be agent No. 401 in a resort town where everyone knows 20 agents,” Meadows said, explaining why she converted to limited service.
Usually she works with sellers, not buyers, and avoids rural properties because of the complexities surrounding outbuildings, codes, mineral rights and other factors.
Her clientele is limited and seasonal; she typically has from five to 15 listings at a time, and the demographics vary widely. Some people trying to sell their current homes to purchase new ones often opt for limited service because they need to save every dime they can during the selling process.
Others prefer to handle real estate transactions mostly independently. Meadows estimates her customers save a minimum of $5,000, depending on the selling price, by dealing through her as opposed to a typical full-service real estate agent.
The average fee to list a house is in the realm of 6 percent of the sales price. Meadows’ sellers generally pay 3 percent to the buyer’s agent. Instead of collecting the other 3 percent, Meadows imposes an up-front fee that ranges from $750 to more than $850, and a $750 closing fee. She estimated those fees amount to about a half percent.
While there is room for substantial monetary savings, there are other associated costs when customers seek more advice than a limited-service broker can give. At that point, the agent charges hourly for consulting advice. The customer is also on the hook for advertising and setting up showings with prospective buyers.
Attempting to gauge the relationship between full-service and limited-service brokers, The Durango Herald contacted local agents, most of whom declined to comment or said they were unfamiliar with the limited-service practice.
Century 21 Premiere broker John Gillam said it’s difficult to speak on the topic, depending on how one defines “limited service” and because of federal regulations designed to prevent monopolies in business that restrict comments.
“If a broker talks about the system as a whole, for example, says it’s a form of competition, people have the ability to choose what they want – that conversation is OK,” Gillam said. “But for a broker to say they don’t like those services or discourage their clients from using them, those are federal antitrust violations.”
Local Jamie Bridges saved about $4,000 by opting for limited service as a first-time seller. Bridges worked with Meadows and said she had two offers within about two weeks of entering the house in the Multiple Listing Service and the house is currently under contract.
Bridges said she wouldn’t go the traditional route after her experience, but buyers and sellers who go for limited service have to be prepared to do the extra work. “One thing I would advise somebody that is considering selling their house this way is to ask yourself, ‘How much work am I willing to put in? Do I have time to set up showings and gather all the necessary documentation once I get under contract? Am I willing to negotiate or do I need a Realtor to do it for me?’”
jpace@durangoherald.com
