An unhappy homeowner wishes she hadn't engaged the services of a discount listing broker who failed to notify her of how little selling agents were being co-offered to sell her home.

Dear Realty Times:

"I have been working with Discount Realty (editor's note: company name has been changed) since the beginning of this year to sell my home. I have a contract with them until July. I am so unhappy with their service and communication. Is there any way that I can get out of this contract before July due to how terrible their service has been. I wish I would have done my research before as I know I would have sold my home sooner. Any suggestions?"

Elaborating, the seller writes, "I wish I would have researched better by talking to people regarding choosing Discount Realty. My biggest complaint is their communication with the homeowner. They never provide feedback when they do open houses or when they speak to potential buyers. It has been over 7 years since we last brought (sic) a home and many things have changed, like the Realtor transfer tax in New Jersey. We did not know that we had to pay about $3,400 when we sold the home. We found out this information by coincidence by talking to another realtor. If we would have known about this upfront it would have affected how we priced the home.

"We were told that they were a full service realtor and that they had exclusive listing on their site for the first two weeks before it would go to the MLS. They mentioned the commission of 3 percent, but did not explain to us that they do not split this amount evenly with the buyers agent. If we would have known that we would not have gone through them at all. The fact that they offer so little to the buyer's agent, we found out, deters other agents from bringing clients to Discount Realty's listing. We heard from many other realtors after the fact.

We have had our listing up for 3.5 months and we have had less than 10 people come over to see the home. Some of these have been from Open Houses we have held on our own. Bottom line here is there is no communication with the seller unless you call them enough times or send emails to them complaining. I did put in a formal complaint to them with my issues and I received a call a day or so later stating that they were sorry.

I asked why they don't provide feedback and keep in communication with us and they simply said they would try to do better. Since this last call I have not heard from them again. The listing agreement does state their marketing tools, negotiations and fees. But customer service is not stated but that should be a given. When my husband and I first decided to sell our home we tried to get a realtor that we had worked in the past that was absolutely wonderful but she moved to Florida. I compare the services that she gave us to what Discount Realty is providing and they don't compare. One of the reasons we chose Discount Realty was because of the low percentage in commission. That was important to us because we had used some of the equity of the home for a business we purchased so we really needed to get as much as possible from the home to purchase another home.

I have sent a formal complaint to NJ association of Realtors. But at this point I feel like taking my home off the market until my contract with them has expired. I have currently been in touch with people that used Discount Realty and they had very similar experiences. Why does a homeowner have to commit to a contract with a realtor especially if the services do not end up being what was promised? Discount Realty would be getting almost $12,000 commission on my home which I feel they have not earned. I feel this is my fault for not researching it better but I feel the seller should have some recourse when the service is lousy.

Thank you for your time. Unhappy seller

Realty Times responds:

There are several facts we aren't sure of -- namely if you've approached the company about getting out of the listing yet and what they may have said. We also don't know what you were promised, and whether your expectations are in line with what the company said it would do.

So without knowing all the facts, here's what we have to say.

You can always try to get out of a listing agreement, but be advised that some companies will not do this easily. While some will graciously let you go, rather than risk bad word of mouth from an unhappy seller, others, especially in a "hot" market, want to be paid for their marketing efforts. They will insist on some kind of formal release that includes a commission to be paid to them in case a buyer buys the property who may have seen it during the listing agreement period, or they may seek repayment of some advertising costs, or require a contract termination fee. That all depends on what your contract says, so go there first to review your options.

I assume that because the agency bills itself as full-service that you signed a contract with some human being. That person is where you should begin. Everything you were promised should be in writing. If it's not there, the agent/agency may not be accountable. The next up the food chain is the broker in charge of the agent with whom you signed the contract. You should make your complaints clear to both. Technically, no matter who was at your kitchen table, you signed an agreement with the broker, so the broker is who should hear your complaint.

Now let's tell it like it is.

First, a transfer tax is paid to the state, so it's not a Realtor transfer tax. Realtors not only don't benefit in any way, every Realtor organization that I know of fights state transfer taxes because they are expensive and discouraging to consumers. The National Association of Realtors is in a heated battle right now with banks and the Treasury Department to keep banks out of real estate. Why? Because with banks under federal oversight, it would be a matter of time before federal transfer taxes are charged on real estate sales, among many other potential dangers to consumers.

Get that idea out of your mind right away. If you want to fight transfer taxes, support your local state real estate association.

Second, you may be able to price a home higher because of the transfer tax, but that doesn't mean you'll get your price. Buyers determine the price by what they are willing to pay for perceived value.

This is a hard lesson to learn, but the marketplace is unlikely to pay you for using your house as an ATM. Your need to get the house to amplify its value in order to repay your business expenses and buy a new house are unrealistic. That's born out by the fact that despite your home's exposure to the MLS, you've had dismally few showings. Everyone in the market knows it's for sale, but no one's making offers. That usually means the price is too high compared to other similar available homes.

Ask your agent for an updated comparable market analysis, and I'll bet you'll find this to be true.

Third, agents are in the business to sell homes, but that doesn't mean they won't take an overpriced listing that doesn't sell. Why? It's free advertising. Other sellers think the agent can get a high price for them, too. So your listing is actually a listing tool to get other sellers to list -- until it doesn't sell. Then it becomes a liability. That's why your agent has stopped paying attention to you. They are going to move on to fresher listings that have a better chance of selling.

Fourth, most discount companies or fee-for-service companies will put the home in the MLS for a nominal fee because that's what the sellers want. Low fees allows the broker to offload more work onto the seller -- like you said, you've been doing your own open houses. So your home has been exposed to the other agents who have buyers, plus buyers without agents looking for homes. Yet it's not selling.

It may surprise you to learn that your home is considered less desirable every day it's on the market, making it harder for buyer's agents to sell your home for you. Why? The first thing buyers want to know is -- how long has this house been on the market? So you've put the buyer's agent in the position to show a more difficult-to-sell home (overpriced) and at half the commission! No wonder you've only had 10 showings. A smart buyer's agent will simply take their buyers to other homes that are priced more realistically -- which can be proven by the market comparables -- and they'll make more money.

This may or not be a strategy of your discount broker. They may want buyer's agents to stay away so they can bring the buyer and get a full commission with no co-op fee. This may be the case because you said your broker kept the listing out of the MLS for two weeks to sell it themselves. That's an eternity for a new listing, and it could have hurt your chances of selling.

Fifth, you had an agent you liked -- why didn't you ask her or her former company for a referral to someone else just as good? Did you interview more than one agent or did you choose Discount Realty without interviewing other agents?

You bought on price, and now you're upset about quality. I agree with you that customer service is something that should be better defined. But how do you know what's good customer service without knowing the standards? Lower fees is not a service. It's a marketing tool, a hook, and it hooked you. The only way to know the difference is to compare between a variety of Realtors and their services. Next time, interview at least three agents with a variety of business models, fees and services. It will be a real eye opener for you.

Bottom line? You got what you were willing to pay for. You knew you were hiring Discount Realty because of their fees because you said as much, but Discount Realty did the main stuff it said it would do -- it put your home in the MLS, but there's a lot more to selling a home than that.

Next time compare services you need first. I have a feeling you know what questions to ask now.

Then compare fees.

Published: May 31, 2006

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