Real Estate Commission Fees

[Mike S.]

We are planning on putting our house on the market in the next few weeks and met with a real estate agent recently. They indicated that the market is red-hot, there is very little inventory in our area, and houses are selling in a day or two (I already knew all this), They also indicated their commission rate is 5%. That being said, I am having a hard time paying a real estate agent close to $20k for a house that is going to be really easy to sell. I understand agents need to make a living and that for a lot of people they are a necessity. However we have already sold a townhouse by owner in the past. We also have a lawyer lined up to help us. So I'm wondering what are my options to reduce or eliminate the commissions fee? Thanks in advance!

[Ryan Husser]

Hi Mike, 

The commission aspect is a question that comes up quite a bit and in the end it is 100% your decision. That being said, likely 2.5-3% of the 5% commission will go to the buyers agent. A lawyer is a good alternative however the costs can vary depending on who you hire. The biggest advantage with an agent is that it will be marketed on the MLS, Zillow, realtor.com, etc.

With a FSBO it will likely not get the same exposure as the MLS and some buyers might not even see the listing. Also, with no agent involved you would need to be present for showings or open houses on your own. Plus, many things can come up during closing that an experienced agent will navigate through. This might be more difficult in an FSBO situation. Examples such as a lower appraisal, title issues, mortgage issues, are all things that can throw a deal under contract, off-track.

Depending on your time and experience FSBO might be the way to go, but if you are even a little unsure I would strongly recommend an agent or at least pricing out an experienced attorney that will be able to help you if issues arise. Hopefully this helps!