With housing prices higher than ever and showing no signs of stopping, many homeowners consider today a seller’s market. There’s also no shortage of buyers, from couples looking to start a family to real estate investors looking to expand their portfolios. Simply put, if you’re in the right location, listings don’t last for long once they hit the market.
If you’re going to sell your home, you’ll want to get the most out of it. One of the best ways to do that is by saving on realtor fees. They’re a staple part of any transaction, but you can use some of these handy techniques to try and minimize them.
What Are Realtor Fees?
Real estate agents collect fees for helping you buy or sell a property. These are often called commissions, and while they vary from time to time, the average is about 6% of the total sale price. Usually, the buyer’s and seller’s agent split the commission in half, so in our example, each would take 3%.
With the 2024 National Association of Realtors settlement, there’s more flexibility in who pays what share of the commission fees. Previously, it was the standard for the seller to pay fees for both agents, and you can still do this if you want to appeal to cost-conscious buyers. However, it’s also possible for the buyer and seller to take care of their own agents’ fees separately.
Avoiding Fees by Selling Your Home Yourself
One of the most straightforward ways to avoid paying realtor commissions is to not use a realtor. The industry term for this is For Sale By Owner (FSBO), and it can save you vast amounts of money if you’re willing to work.
Your first barrier to entry will be getting your home listed through the Multiple Listing Service (MLS). This is the primary place that lists which homes are on the market, sold, pending, or contingent.
You’ll also have to take up all of these responsibilities that a realtor will typically manage on your behalf:
- File all paperwork and mandatory disclosures
- Determine a fair and accurate listing price
- Properly market your home to potential buyers
- Make your home show-ready
- Schedule inspections
- Conduct walkthroughs and work with buyer realtors as necessary
- Host all open houses
- Manage closing costs
- Handle coordination with lenders
- Hire a real estate lawyer
- Pay the commission for the buyer’s agent
As you can probably imagine, this approach is not for everyone. You should only consider selling the FSBO way if you have substantial experience buying and selling real estate, or if you have a house that sells itself in a boom market. Otherwise, the extra time and effort may not be worth it.
How To Lower Realtor Fees
If you’re looking to cut down on realtor fees without selling your own home, there are still plenty of tricks to cut commissions. Competition is fierce in today’s market, so you may be able to leverage multiple different techniques for a good outcome.
Negotiate Your Realtor’s Fee
Everything is a negotiation in real estate, from the first phone call to the last signature. Negotiating realtor fees is normal, and many agents will be flexible with their commissions to land clients.
When you start to work with a realtor, be straightforward and ask if they’re willing to negotiate their fees. If so, you’re good to go. If not, there’s no shame in turning them down and finding a realtor who’s willing to work with you.
Shop for the Best Deal
As with any expensive purchase, you should always shop around when you buy or sell a home. Realtors know they have to fight to secure clients in a competitive market. If you mention you’re currently realtor-shopping to an agent you like, they may be more likely to negotiate with you.
There are other benefits to keeping your options open. Many brokerage agencies don’t allow their agents to negotiate or adjust commission rates, which is an unfortunate industry standard. However, by explaining you’re shopping for an agent willing to negotiate, you can root out those who won’t or can’t from your pool.
Second, shopping around lets you find an agent who’s right for you. It might sound odd, but selling a home can be a personal experience, and your agent will negotiate on your behalf with the buying agent. It pays off to make sure they understand what you need out of the sale and are willing to help you try to get there.
Sell Through the Same Realtor You Buy Through
Another effective strategy is to use the same agent to sell your current home and buy your new one. This streamlines the process for you, and by offering an agent the opportunity for two commissions—one on the sale and one on the purchase—you could have more leverage to negotiate a lower fee.
This approach can appeal to agents since it guarantees them two transactions. You can request a lower commission on the sale of your current home, with the promise of a buyer’s commission later on.
Use a Discount Broker
One of the most appealing alternatives to standard listing agents these days is discount brokers. This is an umbrella term describing any brokerage company that works for a reduced or limited commission, typically between 1% and 2%.
Discount brokers are usually local and offer a wide variety of service models. Some only work with MLS listings and are usually the cheapest of the bunch. Others offer the same level of service as standard brokers but at a much-reduced rate.
The reason why discount brokers can get away with offering less is because they typically use team-based models for buying, selling, and managing properties. Several agents and employees will work on selling your property, and you may not communicate with the same person twice. As a result, you’ll be trading off personal connection and one-on-one communication with a single agent.
Use Third-Party Sellers and a Flat-Rate MLS Listing Service
While listing on the MLS through a real estate agent is the primary way homes get sold, there are plenty of alternatives. Generally, when it comes to FSBO sales, you may think putting a sign on your lawn is the only option. However, you have a few other, faster ways to get your home in front of potential buyers.
Third-Party Listing Sites
Third-party sites let you list your properties directly, often for free or for a minimal fee. Use caution when dealing with them, as some charge fees larger than a real estate agent’s or are fraught with scammers.
These three platforms are some of the most reputable to list your home on:
- Zillow: Zillow is one of the most popular real estate websites. The company charges no commission to list a home, but there are still a few catches. FSBO and realtor listings are separate, which makes it hard for buyers to find your property. Zillow will also try to connect potential buyers with local Zillow-affiliated agents, who will try to collect a 3% commission fee from you.
- Meta (Facebook) Marketplace: Meta allows you to sell just about anything on its marketplace, including homes. Facebook Marketplace’s real estate section debuted in 2017. You can post a direct listing and purchase advertising and listing packages to get your home on the MLS. You can also link your listing on local pages and related groups, which can be a great source of free advertising. While the site is free to use and takes no commissions, it’s more limited than websites like Zillow. It’s also a prime place for scammers and hackers.
- FSBO.com: This site lets you list your FSBO home to a surprising number of viewers for a small fee. It offers packages with syndication to the MLS and other websites like Zillow and is one of the most reliable FSBO-focused platforms out there. Unfortunately, its app has poor reviews and is known to update slowly.
Flat-Rate MLS Listing Services
If you want to get your property directly listed on the MLS without a real estate agent’s help, you can always turn to a flat-rate listing service. These companies only list properties on the MLS, so you won’t be able to use them to help with advertising. However, if you want a quick and cheap way to get your property out there, these websites are the way to go:
- Houzeo.com: Houzeo is a more expansive and premium MLS service than others on this list. There are multiple plan tiers, from Bronze to Platinum. While the lowest tiers are admittedly bare-bones, and you may have to pay to change your listing, they still offer syndication on other sites like Zillow. Higher tiers offer features such as custom yard signs, showings, and brokerage services.
- ISoldMyHouse.com: This site is one of the oldest MLS listing services. It doesn’t have many features, but it makes up for that with a strong reputation, a high Better Business Bureau ranking, and a straightforward process.
- FSBO.com: We’ve already mentioned FSBO.com for direct sales, but it’s also one of the most reliable MLS listing platforms. The MLS service can be expensive, but it can synchronize with other popular sites such as Zillow, Redfin, and Realtor.com. While it has no BBB accreditation, it does have Trustpilot verification.
