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Edited by Darrell Davis
Written by Thomas O'Shaughnessy
Edited by Darrell Davis
Find Top Low Commission Companies | Pay A 1.5% Listing Commission | Negotiate Your Savings | Create An Easier Sale | Learn How To Go FSBO | Use A Limited-Service Approach | FAQs About How To Save On Realtor Fees
When you sell your home, you obviously want to keep as much money as possible after the sale. Thankfully, there are some great ways to save on realtor fees, which can make a huge dent in your earnings.
Read on to learn how you can save money on realtor fees — from negotiating a lower rate with your agent to working with a discount real estate company that makes the process of saving easy.
For example, Clever Real Estate’s free agent-matching service connects you full-service agents from brands like Keller Williams and Century 21. Clever pre-vets its partner agents AND pre-negotiates a lower 1.5% real estate commission.
You save big while getting support from full-service agents in your area.
Learn why Clever is the best way to save on realtor fees today!
How Do Realtor Fees Work?
Before you get started, you need to know how realtor commission fees typically work.
Realtor Fees 101
After a home sells, a percentage of the home’s sale price is split between the seller’s and buyer’s agents. This usually works out to a 6% fee that’s paid out of the seller’s proceeds.
We’ll use 6% throughout this post for ease, but note that average commission rates vary across the U.S. They could be a lot lower in your area!
| Fee | Rate |
|---|---|
| Listing Agent Fee | 2.5-3% |
| Buyer's Agent Fee | 2.5-3% |
| Total Commission | 5-6% |
Both agents involved in the transaction also split their commission with their real estate brokerage.
Before you start negotiating rates, know that many brokers have pre-arranged splits with their agents. Some even prohibit their agents from negotiating on commission at all.
>> Learn more about how realtor fees work.
1. Ask Your Realtor if They’re Open to Negotiating
Sometimes, the best way to save on realtor fees is also the most straightforward — just ask your realtor if there’s any room to negotiate their fee.
Your chances of saving are actually pretty good! A Zillow study found that less than a third of sellers tried negotiating their listing fees, but over half of those who did successfully lowered their rates.
If the agent can’t cut you a deal because of their brokerage arrangement, they’ll say so. If they can, well — that’s when the negotiating starts.
>> Learn how to negotiate with an agent.
2. Offer to Sell and Buy with the Same Agent
What does a real estate agent like more than one commission? Two!
If you’re open to buying your next house with your listing agent, tell them. When you buy with the same agent, they’ll be in the position to earn commission on your home sale, and then a second commission on your purchase.
The prospect of a double commission can give you more leverage to negotiate a lower rate on both.
>> Learn strategies on how to choose a realtor
3. Make Your Home Easier to Sell
A real estate commission effectively pays an agent for their time. If they secure a sale in a few days, it’s much more valuable for them than a sale that takes months to close. After all, a 2% commission on a two-week job beats 3% after three months.
If you intentionally make your home easier to sell, an agent may be more willing to offer a discount on your commission. How can you do that?
Enhance its curb appeal
Buyers make up their minds about a home within seconds. Make a great first impression with fresh paint and spruced-up landscaping.
In an older or hard-to-sell home? Consider a few larger improvements that can make your house more appealing to buyers, like new garage doors and updated siding.
>> Learn about the best paint colors to sell a house.
Offer more flexibility
After-hours showings and pricing adjustments can be inconvenient — but they can also help your home sell a lot faster. Or, if you move out entirely (while keeping the home staged with furniture) it makes showings even easier for an agent.
Basically, let your agent know from the start that you’re willing to do whatever it takes to make your sale go quickly and smoothly.
4. Don’t Be Afraid to Shop Around
Always let potential agents know that you’re interviewing multiple realtors. They may be more willing to cut you a deal if they know your business is at stake or it could go to their competitors.
There are practical reasons to shop around, too.
As we mentioned, some brokerages prohibit agents from reducing their commission. You may have to interview several agents before you find one who’s even allowed — much less willing — to cut you a deal.
If finding and interviewing multiple agents sounds like a lot of work, Clever Real Estate can help.
Clever has already done the hard work of pre-vetting agents in your area. Its partner agents are full-service realtors who work at top brands like RE/MAX and Keller Williams. Clever pre-negotiates a low 1.5% commission with them.
5. Consider Dual Agency
Dual agency is when one agent represents both the buyer and seller. If this sounds like it might be a conflict of interest — well, it can be.
A listing agent’s goal is to get the highest possible price for their client; the buyer’s agent wants to help their client get the lowest price.
It can be incredibly difficult to balance these opposing goals. And, because of this inherent conflict, dual agency is actually illegal in a few states.
But, if you want to save on realtor fees, dual agency might be an option. Like buying and selling with the same agent, you can ask your agent to lower their commission rate as they stand to earn two commissions.
Since dual agency is complicated only consider it in limited situations, such as if:
- You already have a buyer and just need an agent to handle the paperwork
- Your agent represents a great buyer who’s ready to meet your price without negotiating
- You’re an experienced negotiator who can represent your own interests at the negotiating table
6. Offer a Lower Buyer’s Agent Commission (Maybe!)
Everything in a real estate transaction is negotiable — and that includes the 3% buyer’s agent commission. If you’re serious about avoiding realtor fees, it’s a way to do so, with a BIG caveat.
Editor’s Note
Offering a lower buyer’s agent commission is usually NOT a good idea. A competitive rate incentivizes agents to bring their buyers to your property. Remove or reduce it, and some agents may steer their clients away from your property, making it harder to sell.
That being said, if you’re in a VERY hot seller’s market with limited inventory and a desirable property, you may have enough leverage to offer a slightly lower buyer’s agent commission and still attract interest.
Don’t do away with your buyer’s agent commission entirely, or even reduce it dramatically. Lower it just below competitive rates in your area or you risk alienating buyers.
If you have one, ask your listing agent for their advice. They can let you know how much of a reduction would be appropriate — or if it’s a bad idea. No one knows the market better than an agent, so take their guidance seriously!
7. Dare to Go FSBO
The most dramatic way to save on realtor fees is to eliminate one of the agents entirely and sell your home yourself.
A “for sale by owner” (FSBO) listing can save you thousands in commission, but it’s a LOT of work.
| Pros | Cons |
|---|---|
| You have total control over every aspect of your sale | You have total control — meaning you have to manage EVERY aspect of the sale |
| You'll eliminate about half of your commission fees — the typical 3% listing fee | You still need to offer a competitive 3% buyer’s agent commission to attract buyers |
| It gives you the flexibility to pay only for the a la carte services you need | If you overlook mandatory disclosures or misfile paperwork, you could face serious financial or legal consequences |
Who should consider a FSBO listing?
If you’re serious about saving money on realtor fees, FSBO may be a good option for:
- Experienced professionals with experience in marketing, negotiation, or the legal profession (or ideally all three)
- Sellers in hot markets with low inventory who can expect to get multiple showings on the first day and multiple bids in the first week
- Sellers with a very desirable property that can literally sell itself even in a lukewarm seller’s market
How to sell FSBO, from A to Z
Our earlier guides cover almost every aspect of a FSBO sale, from the best websites to use, to how much paperwork you can expect to do. (Spoiler: a lot.)
>> Learn about the complete process of selling a house by FSBO
>> Find the best FSBO websites in 2020
>> Learn about all the paperwork involved in a FSBO sale
8. Use a Flat Fee MLS Listing Service
Only a licensed agent can list a property on your local multiple listing service (MLS). The MLS is the main directory for local buyers to find available properties, and it pushes your listing to major websites like Redfin or Zillow.
If you’re going FSBO, but still want to reach as many buyers as possible, there’s one solution.
For a few hundred dollars, a flat fee MLS service will list your home on the MLS. From there, your listing will populate onto major real estate sites so your home has the same visibility as a home being sold by an agent.
A flat fee MLS service generally doesn’t do anything beyond that, though. They don’t offer agent services like pricing help, showings, negotiation, or closing support. Some may offer very limited add-on services, like photos or for-sale signs.
But if you’ve decided on an FSBO sale, you likely don’t want an agent’s help. In that sense, a flat fee MLS listing service is a perfect — and some would say necessary — complement to a FSBO listing.
>> Learn more about flat fee MLS listing services.
9. Consider a Limited-Service Approach
A full-service agent handles every aspect of your home sale, from staging to pricing to closing coordination. But what if you don’t need all of those services?
Limited-service real estate agents offer reduced or a la carte services so you can pick and choose only those services you need. It’s a way to save on realtor fees by reducing the support you get from an agent.
This option isn’t for everyone, though. It’s best for sellers with special expertise or experience in the real estate industry.
For example, if you’re an interior designer, you probably don’t need help with staging. Or, if you’re an attorney, you may be able to handle the negotiation and closing process, but want support for staging and showings.
If you fit that bill, a limited-service agent might make sense — and could help you save money on realtor fees.
>> Learn about the differences between full- and limited-service agents.
10. Find a Great Low Commission Company
One of the easiest ways to save money on your home sale is by working with a low commission real estate company.
Note that most of these companies help you save on your listing fees — you’ll still offer a competitive buyer’s agent commission.
There are two main types of these companies.
Discount real estate brokerages
Discount brokerages, like Redfin, use innovative service models to make the selling process more efficient — and then they pass those savings onto their customers. Many offer flat-fee commissions or reduced commission rates around 1.5-2%.
While these can be a great option, make sure you’re aware of exactly what you’re getting.
Many discount brokers advertise a full-service experience, but you may face some trade-offs from working with a traditional agent.
For example, Redfin advertises a 1.5% listing commission. Redfin uses salaried, in-house agents, and a team-based approach to turn over a high number of transactions in a shorter amount of time.
This approach can sometimes result in spotty communication, mistakes, lost paperwork, and uneven service.
>> Learn about the pros and cons of working with discount real estate brokers.
Agent-matching services
Agent-matching services, like Clever Real Estate, connect sellers with pre-vetted, top agents in their local markets. These listing agents provide a full-service experience for a lower pre-negotiated commission.
With this approach, the agents get a steady stream of high-quality leads. While they may make slightly less on each sale, they can reduce marketing and outreach expenses.
The seller gets a full-service, top of the line agent experience for often thousands less than full commission.
Save Big on Realtor Fees
If you want to save on realtor fees, we can’t recommend our friends at Clever Real Estate enough.
With their free agent-matching service, you won’t have to negotiate with an agent or do all the heavy lifting of your sale. You get a traditional agent experience for only 1.5% listing commission.
Contact Clever today to save on your next home sale!
FAQs About Realtor Fees
Are real estate commissions negotiable?
Yes! Everything in a real estate transaction is negotiable — but that doesn’t mean it’ll be easy. A real estate agent is a professional negotiator, and you’re essentially asking them to do their job for less pay. The key to any negotiation is understanding the leverage you have.
How much are realtor fees?
Average realtor fees are typically 6% of the final sale price, though this average is falling across the U.S. This commission is split between the listing and buyer’s agent, with each receiving around 3%. How much money are we talking in real dollars? A 6% commission on a $250,000 home is $15,000; that same 6% on a $500,000 home would be $30,000. That’s significant money!
Who pays realtor fees?
Traditionally, the seller pays the realtor fees out of the sale proceeds. The logic is that both agents are essentially working for the seller: the listing agent is putting the home on the market, and the buyer’s agent is bringing a qualified buyer to the table.
When do you pay realtor fees?
Realtor fees are withheld from the sale proceeds at closing, then distributed to the brokerages of the listing agent and the buyer’s agent. The brokerages pay out each agent according to their agreed-upon split.
Related Links
Everything You Should Know About Realtor Fees: This definitive guide explains the typical realtor fees you’ll pay, what a fair commission is, and where the money goes.
Who Pays Realtor Fees? Does the seller really pay the buyer’s agent? Who pays the agent’s brokers? This guide answers all those questions and more.
These Companies Offer the Lowest Real Estate Commission Fees: If you’re looking to save on real estate commission, these companies offer the lowest rates — and the best service.
Read This BEFORE You Pay for a Flat Fee MLS Service: A flat fee MLS service sounds like a great deal, but it comes with big tradeoffs you need to know beforehand.
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