How to save on Realtor fees

Believe it or not, selling a house isn’t all profit. There are a number of costs associated with selling a house but, usually, the largest is the real estate agent fees. Fortunately, these are also some of the most negotiable fees.

The average real estate commission on a home sale in the United States is between 1.5% and 6% of the sale price. As of the end of 2023, the median home sale price is $417,700. So, do a little math and you’ll see Realtor fees may be as much as $25,000 on an average priced house. Considering that home sellers traditionally pay the entirety of agents’ fees, you owe it to yourself to explore ways to save on real estate fees without sacrificing quality of service.

1. Negotiate the commission

There are more potential homebuyers than there are sellers, making it a seller’s market. As such, you have a little leverage as a home seller. You don’t need to just go with the first real estate agent you talk to and accept their fee structure.

When you decide you might want to sell your house, interview at least three agents to get an idea of what it might be like to work with them and what they charge in fees. (Here's what to ask a Realtor when selling your home.)

It’s a competitive market for agents, too, so don’t be afraid to ask for a reduced commission upfront. An agent who is willing to take a lower commission percentage probably feels confident they can get your house to go for over asking price. The higher your house sells for, the more your agent stands to make, so they may be willing to cut a lower percentage if they feel your home stands to sell for an above-average price.

Interviewing agents and getting commission quotes will help you leverage offers against one another to find the best agent for your home sale while saving on realtor fees.

2. Sell and buy with the same agent

One wrinkle you can build into your negotiation is an agreement to use an agent for both the sale of your home and the purchase of your next one. While an agent might take a reduced percentage, they’d be getting that percentage on two homes instead of one. This is a particularly strong option for wealthier sellers who stand to have two substantial real estate transactions.

Better yet, if you buy a lot of property, working exclusively with the same agent is a good way to get a kind of bulk deal. If you’re buying and selling multiple properties every few years, a savvy agent will likely cut you a good commission rate knowing that they’ll manage a higher volume of listings for you.

3. Find a discount brokerage

Discount real estate brokerages have emerged as part of the incredible growth of the housing market over the past two decades. These brokerages, like ZipReality or Redfin, charge reduced fees for home sellers. However, there’s a reason they can do this. Discount brokerages work with tremendous volume, meaning in exchange for the reduced fee, you will have less personal service and you may have difficulty reaching your assigned agent whenever you’d like.

If you have a house you think can sell itself but need some help with the selling process, a discount brokerage may be right for you.

4. Find a flat-fee listing service

Similar to discount real estate brokerages, flat-fee services operate on volume. These services allow you to place your property on the Multiple Listing Service (MLS) used by real estate professionals. You handle showing the home and negotiating with potential buyers while the service allows you to reach a much larger pool of potential buyers, as well as a network of buyer’s real estate agents.

If you find a buyer through a flat-fee listing service, you’ll be responsible for the listing fee but only the buyer’s commission, effectively cutting your realtor fee in half.

5. Dual agency sale

Not to be confused with using the same agent to sell and buy your next home, a dual agency sale is when one agent represents both the buyer and the seller. Dual agency sales are not legal in every state because it can be difficult for an agent to act in the best interests of both the buyer and seller when they’re on opposite sides of a negotiation.

That said, dual agency remains legal in many states because it can be productive and cost-effective. One agent handling all negotiations between buyer and seller can make the process more efficient and more amicable. If they’re willing to take a lower commission rate, then it can also be more affordable for the seller.

6. For Sale by Owner (FSBO)

Finally, while most homeowners choose to use a real estate agent, you are entitled to sell your home without one. For Sale by Owner (FSBO) sellers can access services like the MLS or FSBO-specific listing websites for fees that amount to much less than you’d pay an agent. You could even pay an agent to provide advice or a transaction broker to facilitate if it’s your first time managing a sale yourself.

It’s important to note, however, that if a buyer is working with an agent, you’ll still need to pay the buyer’s realtor fee. That still represents a significant savings when you don’t have to pay the seller’s agent fee.

Selling a house isn’t free. Typically, a seller is responsible for paying the real estate agents’ commissions, in addition to some other closing costs. Realtor fees, however, are the most significant cost to home sellers. Fortunately, this guide will help you save on realtor fees on any home sales in the future.