Discount vs. Full-Service Realtor: What You’re Really Paying For

There is a very basic understanding of Discount and Full Service real estate agents, which is often reduced to a simple pros and cons list. However, due to shifts in the real estate market, many discount realtors are now offering similar — if not identical — services to their full-service counterparts.

In this article, we answer three important questions:

  • Does a higher commission translate to better outcomes?
  • Do discount brokerages cut corners — or just cut fluff?
  • What does “full service” actually mean, and how do you measure it?

Quick Comparison: Discount vs. Full-Service Realtor

Discount Realtor Pros Cons
Lower Fees (1%–1.5% listing commission, 2–2.5% buyer side) - Lower commission costs
- Suitable if you can handle parts of the sale yourself 		- Marketing budget may be smaller
- Potentially less hands-on support
- Negotiation skill varies
Flat-Fee Option ($999–$6,000 MLS) - Predictable cost
- Good for experienced sellers 		- Limited services unless upgraded
- Seller may handle staging/showings
Discount Realtor Pros Cons
End-to-End Service (2.5% listing commission, 2–2.5% buyer side) - Handles all sale aspects
- Professional marketing & staging
- Skilled negotiation 		- Higher commission cost
- Quality varies — “full service” isn’t always full effort

1. Does a Higher Commission Translate to Better Outcomes?

Answer: Research shows no consistent link between higher commission rates and better sale prices or faster closings. Performance is driven more by agent skill, marketing strategy, and property condition than by the percentage charged.

  • Levitt & Syverson (2008) – Agents kept their own homes on the market 10 days longer and sold for 3–4% more than client homes, suggesting faster turnover is prioritized over top price when agents are paid by commission percentage (Review of Economics and Statistics).
  • Grochulski & Wang (2024) – Found that percentage-based commissions distort incentives, potentially reducing market efficiency (Federal Reserve Bank of Richmond).
  • Competition Bureau of Canada – Notes that standard commission structures reduce competitive differentiation and may not align with consumer value (Competition Bureau).

Full-Service Agents

💡 What They Offer

Under a full-service agreement, the listing agent typically charges 2.5% of the final sale price, with another 2.5% offered to the buyer’s agent — often structured as a non-negotiable co-op split on MLS. Here’s what a full-service agent usually provides:

  • Pre-listing prep: Home valuation, repairs, timing strategy
  • Marketing materials: Photography, staging, floorplans, MLS + third-party syndication
  • Buyer outreach: Open houses, private showings (via centralized platforms)
  • Negotiation: Offer handling, counteroffers, closing coordination
  • Post-offer support: Liaising with lawyers, inspectors, and lenders

But while marketed as “full service,” this package is not performance-based. Most agents get paid regardless of whether they sell in 5 days or 45, and regardless of how close they get to the original list price.

Disclaimer: Not all “full-service” agents include every service listed above. Scope varies significantly. Always request a written service schedule.

Where the Money Goes

On a $900,000 home:

  • Listing side commission (2.5%): $22,500
  • Buyer side commission (2.5%): $22,500
  • Total commission: $45,000

From the listing agent’s portion:

  • ~30–50% goes to their brokerage
  • ~$1,000–$3,000 may be allocated to marketing
  • Remainder is agent income

In most cases, there’s no financial penalty for underperformance — and no bonus for exceeding market expectations.

2. Do Discount Brokerages Cut Corners — or Just Cut Fluff?

Answer: Many modern discount brokerages operate with leaner systems and tech efficiencies, allowing them to offer full-service support at lower fees. However, service levels vary — some truly reduce scope, others simply remove non-essential costs.

Discount and Flat-Fee Realtors

💡 What They Offer

Discount realtors often operate under one of two models:

  • Flat-fee MLS placement — Typically ranging from $999 to $6,000, providing exposure without ongoing support (however, some agencies may provide full support)
  • Low-percentage listing commission — Usually 1% to 1.5% on the listing side
  • Buyer-side commission — Still typically offered at 2% to 2.5%, especially in Ontario markets, to remain competitive on MLS

However, a growing number of discount agents — especially in the GTA and Toronto — now offer the same core services as full-service agents, due to both rising home values and increased competition in the brokerage space.

This may include:

  • Pre-listing prep: Home valuation, repairs, timing strategy
  • Marketing materials: Professional photography, staging, floorplans, and third-party MLS syndication
  • Buyer outreach: Open houses, private showings (via centralized scheduling platforms)
  • Negotiation: Offer handling, counteroffers, seller advocacy
  • Post-offer support: Coordination with legal professionals, inspectors, and mortgage brokers

Why the shift?

Because home prices have outpaced the traditional 3% year-over-year growth rate.
In 2025, the average home in Toronto sells for over $1 million, meaning that even at 1% commission, an agent may earn $10,000+ — enough to justify full-service support, especially when using leaner marketing systems and brokerage tech.

Disclaimer: While some discount agents offer comprehensive services, others operate strictly as listing conduits. Always confirm what’s included, what’s optional, and how service quality is maintained.

Corner-Cutting vs. Fluff-Cutting Table

Corner-Cutting Fluff-Cutting
Minimal marketing beyond MLS Leveraging in-house photographers instead of outsourcing
Limited availability for showings Using automated scheduling platforms to save time
No staging or pricing strategy Digital staging instead of costly physical staging
Infrequent client updates Streamlined updates via CRM or client portals

3. What Does “Full Service” Actually Mean, and How Do You Measure It?

Answer: “Full service” should be evaluated by measurable performance indicators — not just a checklist of tasks.

How to Measure It:

  • Days on Market (DOM) vs. area average
  • Sale-to-List Price Ratio (SLR)
  • Marketing Spend per Listing
  • Lead Response Time to buyer inquiries
  • Staging Quality (professional vs. DIY)

Scenario Modeling: Comparing Structures You Can Negotiate

Model Commission Seller Workload Net Sale Control
Full-Service 2.5% (Listing Agent) Low Medium
Discount (Low or One Percent) 1-1.5% (Listing Agent) Low High
Custom / Hybrid (Seller-Initiated) 1% base + performance bonus Low High

Custom Fee Structure Example:

  • 1% base + 0.25% bonus if home sells above appraised value
  • $2,500 bonus if sold within 7 days
  • Sliding-scale incentive: Higher fee if the home sells over a target price, lower if not

Note: Hybrid fee models are not commonly advertised. However, sellers can initiate this conversation to align commission with outcome. This can incentivize stronger marketing effort, better pricing strategy, and shared accountability.

Disclaimer: Not all agents are open to customizing their commission. Willingness may depend on brokerage policy, property type, and market conditions. Always discuss compensation models early in the interview process.

Regulatory Landscape in Canada

  • Competition Bureau of Canada – Challenged CREA’s commission rules in 2010 and is investigating again in 2024 (Competition Bureau)
  • U.S. Class Actions (2023–2024) – Burnett v. NAR resulted in $418M settlement and rule changes removing mandatory buyer-agent commission offers (Barron’s)
  • Quebec’s OACIQ – Requires explicit disclosure of compensation and unbundled services (OACIQ)

Conclusion – It’s Not Just What You Pay

Commission is an incentive structure — not a guarantee of results.

  • Lower fee ≠ lower service in all cases
  • Higher fee ≠ better outcomes without proven performance
  • Sellers should evaluate metrics, not promises, and consider negotiating custom incentive-based models to align agent goals with their own.
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Faiza Ahmed (Broker)

As the founder of PropertyMesh, Faiza Ahmed is dedicated to making real estate more transparent and cost-effective. While she actively challenges the high-commission model to help sellers keep more of their equity, her core passion is empowering all clients — buyers and sellers alike — to make informed decisions in an ever-evolving market.

Faiza is a licensed real estate broker registered with the Real Estate Council of Ontario (RECO Registration #4791581) and an active member of the Toronto Regional Real Estate Board (TRREB).