How to Save Money on Real Estate Agent Fees

Consumer Reports tells us how to save money on real estate agent fees: negotiate. Their thoughts from a recent survey:

You can negotiate the [agent's] fee. The usual 6 percent commission that agents charge sellers has been standard for so long that many homeowners apparently don’t realize it’s negotiable. But 46 percent of the sellers in our poll attempted to negotiate a lower commission and roughly 71 percent of that group succeeded.

Better yet, paying a lower fee doesn't hurt your selling price:

We found that paying an agent a lower commission rarely had any effect on the sales price. And readers who paid commissions of 3 percent or less were just as happy with their brokers’ performance as those who paid 6 percent or more. People who paid extra, in fact, were more likely to say they had regrets about the selling process. The biggest regret? Nearly one-third said they should have been more assertive in negotiating their agent’s fee.

Furthermore, paying less doesn't result in bad service:

The industry generally defends the full 6 percent commission by saying it enables brokers to provide all the services home sellers need. And some of our survey respondents who paid lower commissions did get fewer services from their agents. But there wasn’t as big a gap as you might expect. For example, 81 percent who paid 3 percent or less said the agent provided a competitive market analysis of their home, compared with 87 percent of people who paid 6 percent or more. And those who paid a lower commission were somewhat less likely to have agent-sponsored open houses (54 vs. 59 percent).

So much for paying your realtor a HIGHER fee, huh?

If interested, you can compare what you get for a 3% commission versus a 6% commission. It's not much different.

We've negotiated with our agent to charge us 1% to sell our house if we buy our new house using her. On our end, the 1% covers her handling all of the paperwork (which is worth it), though we know we'll need to do most of the marketing ourselves. The 1% gets us on the multi-list though, which seems to be about 90% of the "marketing" that most agents do.

Comments

[Anonymous]

Realtors are a cartel guarding the MLS to make you think they have more value than a few weeks of 1 hour classes. Use Craigslist, Zillow, and a good lawyer to buy a home. Don't use realtors.

[alicia]

Just wrote a post about the possibility of selling my coop without a broker. The last 2 sales in my building were done sans broker. They ran a few ads and had only 2 open houses and both got their asking price.