How to Avoid Realtor Fees

At a glance

The average real estate commission fee for a home valued at $350,000 amounts to more than $20,000. That’s a lot of money.

But there are things you can do to avoid expensive realtor fees or minimize the amount you pay. We’ve put together a list of tips ranging from negotiating your commission amount to using a company like Homie that can save you $10,000.

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How do realtor fees work?

Realtors charge fees of about 6% of the value of your home. These fees are typically split half-and-half between the seller’s agent and the buyer’s agent—but the seller pays both fees. (It’s weird, but that’s how it works.)

For a home valued at $350,000, standard realtor fees come to $21,000.

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WHAT IS A REALTOR’S COMMISSION?

WHAT IS A REALTOR’S COMMISSION?

A realtor’s commission is how realtors get paid. Instead of charging a flat rate, realtors receive a portion of your home’s value (the typical real estate commission is about 6%).

How to avoid realtor fees when selling a house

You can do several things to avoid—or at least reduce—realtor fees when selling a house. See if any of these options fit your situation.

Do it yourself

You’ll save approximately 6% of your home’s value if you sell your home by yourself instead of using a realtor. That’s not much if you’re talking about sales tax on a candy bar, but it’s more than $20,000 for the average home.

The downside is significant, though. If you don’t pay a realtor, you need the time and expertise to do all the tricky things realtors charge for by yourself:

  • Know what home improvements to make
  • Determine listing price
  • Market your home
  • Gain access to the full Multiple Listing Service (MLS) website
  • Understand the paperwork

But that’s not all. If you try to do it yourself, chances are you’ll make less money—a lot less. In 2018, the average selling price for homeowners who didn’t use a realtor was $200,000, while those who used realtors banked an extra $80,000.1

That might make that $20,000 in average realtor fees easier to swallow.

Selling your home without any professional assistance is risky—and potentially expensive. But if you can find a way to replicate the realtors’ skills, doing it yourself could save you tens of thousands of dollars.

Get money

ANOTHER WAY REALTORS SAVE YOU MONEY

ANOTHER WAY REALTORS SAVE YOU MONEY

The multiple listing service (MLS) is the main real estate hub: everyone sees your home’s listing. You can pay a fee to list your home without a realtor, but it can get flagged as For Sale by Owner (FSBO) and lower your selling price.

Compare realtors

Not all realtors charge the same amount. The typical real estate commission is about 6%, but some realtors charge a bit less—and others ask for a lot more. It depends on what they bring to the table.

Many realtors are amateurs, while some work for fancy brokerages with a reputation for quickly selling houses at top dollar. When 1 in every 165 people is a realtor, you have plenty of options to choose from.

Even if you find a realtor who offers only a small percentage break, it still saves you thousands of dollars.

Negotiate fees

Everything in real estate is negotiable—including your realtor’s commission. Just because you can’t find a realtor who offers a low initial fee doesn’t mean you can’t persuade them to reduce their rates.

If you’re the type of negotiator that can make a used car salesman sweat, you can probably get a realtor to lower your commission fee.

Bullhorn

HOW TO NEGOTIATE WITH A REALTOR

HOW TO NEGOTIATE WITH A REALTOR

You can save money by negotiating your realtor’s commission fee. When you find a real estate agent you like, come right out and ask: “Are you willing to negotiate your fee?”

Find a discount real estate broker

Consider a discount brokerage if the thought of paying a $20,000 commission scares you. Many companies offer basic services like listing your home on MLS for a flat fee of $1,000 or less. Since realtors consider MLS to be one of their top competitive advantages,1 you get access to a big piece of the pie. But only a piece.

The reason discount brokerages can offer flat low fees is that listing your home is the only service they provide. If you have questions, they won’t answer them. If you need help with something else like marketing your home or making a counteroffer, they can’t help.

Your MLS listing could even be flagged to indicate you’ve listed it through a flat-rate brokerage and don’t have the assistance of a real estate agent. And that can turn off interested parties.

So you could save thousands of dollars by not paying a realtor’s commission, but it also might mean your house fetches a lower amount and takes longer to sell. Discount brokerages work best for homeowners who aren’t in a rush and know how to price their homes.

Price tag

SAVE MONEY WITH A MOVING GRANT

SAVE MONEY WITH A MOVING GRANT

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Use Homie

Homie is an innovative company that saves the average homeowner $10,000.2 It offers lower fees than realtors, and it also provides more services than discount brokerages.

Homie can charge less in part because it pays its agents a salary instead of a commission. So there’s no constant salesy pressure to buy, and you still get someone who helps you with the tough stuff like paperwork and negotiations.

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People also asked

How much is a real estate agent commission?

The national average for a real estate agent commission is 5.8% of a home’s sale price. The real estate agent commission is split equally between the buyer’s agent and the seller’s agent, although the seller pays both fees.

What percentage do real estate agents get?

Real estate agents get approximately 6% of the selling price of your home. The amount is typically split between the seller’s agent and the buyer’s agent, and the selling homeowner pays both fees.

Are realtor fees negotiable?

Yes, realtor fees are negotiable. While the average home sale costs 5.8% in realtor fees, you can ask realtors if they are willing to negotiate their fees. You can also use a company like Homie that offers a flat low fee.

What is a listing agent?

A listing agent is the seller’s real estate agent who lists a home on MLS. Potential buyers are represented by buyers’ agents—although the home seller pays the buyer’s agent commission.

What does FSBO mean?

FSBO is a real estate term that means “for sale by owner.” FSBO sellers typically make about $80,000 less on real estate transactions than homeowners represented by real estate professionals.1 The upside of FSBO is that you don’t have to pay an agent’s commission.

Does a seller’s agent cost more than a buyer’s agent?

Yes, a seller’s agent costs more than a buyer’s agent—when you look at who’s responsible for paying them. Although both agents are typically paid the same amount (a 3% commission), the selling homeowner is responsible for both fees. That’s why you’ll often hear home selling fees described as a 6% commission for sellers only.

Who pays higher real estate fees—the home buyer or seller?

The home seller pays higher real estate fees. In fact, the home seller pays the fees for both the seller’s agent and the buyer’s agent (about 3% of the home value to each agent).

Sources

1. National Association of Realtors, “Quick Real Estate Statistics,” July 17, 2020. Accessed August 18, 2020.
2. Homie.com, “You’ll Save Thousands When You Sell With Homie,” 2020. Accessed August 18, 2020.

About Kurt Manwaring

Kurt Manwaring
Kurt Manwaring brings nearly a decade’s worth of research experience as a business consultant to the Move.org team. He specializes in taking complicated issues (like moving) and presenting them in a way that everyone can understand. His writing has been featured in hundreds of publications, including USA Today, Country Living, Good Housekeeping, Heavy, Slate, and Yahoo! Lifestyle. He would love to hear about your moving experiences and questions at kurt@move.org.