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

An image of a limited service real estate agent speaking with their client.

Lori Lovely edited the Real Estate Home section for the Indianapolis Star and covered the annual Dream Home construction and decor for Indianapolis Monthly magazine. She has written guides for selling houses and more.

Fran Metz , Contributing Editor Fran Metz Contributing Editor

Fran Metz is a freelance content writer, editor, blogger and traveler based in Las Vegas, Nevada. She has seven years of experience in print journalism, working at newspapers from coast to coast. She has a BA in Mass Communications from Fort Lewis College in Durango, Colorado, and lived in Arvada for 15 years, where she gained her experience with the ever-changing real estate market. In her free time, she enjoys 4-wheeling, fishing, and creating digital art.

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Not thrilled about paying real estate commissions but not ready to go all-in on a DIY home sale? A limited-service real estate agent might be your ideal middle ground, offering just the right mix of support and savings.

We’ll dive into what limited-service real estate agents offer — and don’t offer — including their services and fees, so you can make an informed decision.

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What is a limited-service real estate agent?

As you might expect, a limited-service real estate agent provides fewer services than a full-service agent does for a lower price.

Many limited-service brokerages start and stop at listing your property on the local multiple listing service (MLS). Only licensed real estate agents can list on the MLS, which is why many For Sale by Owner (FSBO) sellers hire a limited-service real estate agent to complete this task.

Getting an MLS listing is nearly essential in today’s housing market: About 90% of sellers use their local MLS to list their homes. The MLS also automatically syndicates the listing to other property websites for broader exposure.

Besides listing your property on the MLS, limited-service agents might offer additional services as part of their fee. And some may have tiered pricing based on which services you desire:

Fees for limited-service agents vary

Some limited-service agents charge a flat-fee averaging about $3,000, but the cost depends on the agent and the market. Other limited-service agents charge a reduced commission ranging from 1% to 2%.

If you use a flat-fee MLS listing agent, keep in mind that the broker usually sets an expiration date for your MLS listing, often about 60 days, and you might need to pay an extra fee to renew it.

A limited-service real estate agent should give you a contract that clearly outlines what services are included, what’s not, and the costs and length of the agreement.

“Rule #1 is ‘everything in writing,’” says top agent Shawn Rogers, who works with over 65% more single-family homes than the average agent in Gilbert, Arizona. He emphasizes the importance of having a written record to ensure both parties are on the same page.

An image of a real estate agent meeting with a client at a house

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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.

Two buyers using a computer to find an agent.

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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.

Header Image Source: (fizkes / Shutterstock)

  1. "Should you hire an attorney when you buy or sell a home?", LegalZoom (June 2024)
  2. "The pros and cons of a dual agency", The Law Office of William Stanger (November 2023)
  3. "2024 Home Buyers and Sellers Generational Trends Report", National Association of REALTORS® (April 2024)
  4. "Discount Agents: Everything You Need to Know", FastExpert (January 2024)