Do I Have to Pay a Commission to Sell My Home?
5 Ways to Reduce the Commission when you Sell Your Home
by Peggy Boehm, March 15, 2007
Commission to a real estate agent is just one of many standard costs you pay when selling a home… or is it? If you are selling a home, of course you want to get it sold fast and at the best possible price. Using a real estate agent is still proven to be the most effective way to do so, and that's why the agent gets paid commission.
However, sellers these days have more options than just signing a listing agreement with a traditional agent and paying standard commissions. Instead of paying the typical five to six percent commissions, there are alternative ways to save.
Ask your agent for a discount
More and more traditional brokers and agents offer a blend of pricing and services. Traditional agents sometimes have more flexibility in commission pricing if you are a past client. Particularly if you list your home, and then purchase another property with the same agent, the agent may be willing to offer a reduction in fees. Non-franchise agencies typically are more able to reduce commissions than the major franchises like Century 21 and Coldwell Banker.
Alisha Wade of RE/MAX Achievers in Scottsdale, Arizona, may agree to reduce commissions for repeat clients, as much as five percent total. "If I represent a client who both lists a property and buys a new home with me, I will offer a reduced rate," says Wade. "I value my clients and want to keep them for life, so I am happy to do it."
List with a discount broker
You can locate discount brokers in most areas of the country. One such broker is Allen Bertke, owner of Bertke Real Estate Consulting Services in Santa Barbara, California. Because he is an independent broker not affiliated with any franchise, Bertke is able to offer his services on a sliding scale to his prospective home sellers. His fee varies depending on the sale price of the house but is generally 2/3 of one percent.
Bertke said that even though he discounts his commission, an agreement to list with him "is entirely full service and includes listing on the MLS, yard sign, lock box, color fliers, signs for open houses, open houses (held by his associates or the seller), broker tours and ad design." One of the only add-on fees is for the advertisement.
ZipRealty Inc., www.ziprealty.com, is a quickly growing national brokerage firm, which offers substantial savings on listing services to homeowners. ZipRealty offers a minimum listing fee of $2,000, plus an agreed upon cooperating brokerage fee.
List your property "For Sale by Owner"
Advertising a property For Sale by Owner (FSBO) is a common alternative for home sellers. One of the downsides to selling a home "by owner" is the potential to miss qualified buyers who are working directly with area real estate agents. Most real estate agents show their qualified buyers only properties listed on the MLS since the commission agreements are already negotiated up front and the agent is "guaranteed" a commission. However, with a lot of research, continued effort and a little luck, you may be successful in finding a qualified buyer on your own who can close when you want, at the price you are asking.
Explore different Real Estate sites on the Internet
Many Internet sites offer feeds to local MLS's where you can view listings of properties for sale. These sites do not facilitate the actual real estate transaction, but it enables sellers an alternative to using an agent the traditional way. One of the more popular sites is www.Redfin.com, a Seattle company now in San Francisco and soon available in selected East coast cities. On Redfin, sellers can list a home and put it on the MLS (Multiple Listing Services) for as little as $2,000.
There are also sites that offer flat fee listing services. These services generally average between $199 and $499 and typically only provide a listing on the MLS.
Select an agent who offers a "menu" of real estate services
Some agents structure their pricing based on a sliding scale for the level of service you choose, which can save you money. The services offered range from listing the property on MLS and posting a sign and a lock-box, to providing professional fliers, taking photos and assisting with staging. Advanced services include holding open houses, doing online and offline advertising like search marketing, handling negotiations and details like meeting home inspectors and contractors, and closing the sale.
If you are interested in saving money when you sell your home, there are options available. However, be prepared to do extra work that an agent would normally do for you. Sometimes, you just get what you pay for.
Copyright © 2007 HomeGain.com, Inc.
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