Sellers who want to avoid the full 6% real estate commissions have six basic alternatives:
- Sell to an Unrepresented Buyer in FSBO: To save the full 6%, a FSBO seller sells to a buyer without an agent. About 20% of buyers, at any given time, are not represented. However this number is likely to increase as the new laws concerning buyer-agent representation takes hold, wherein buyers must negotiate (up-front) with agents for payment/commission and committments. This will apply pressure on buyers to become more “DIY Buyer” savvy. Moreover, as more FSBO sellers come on to the market, buyers will see more opportunities for price drops and negotiations by both sides saving on the commission costs.
- Sell For Sale By Owner (FSBO): Selling without a listing agent can save the seller 2.5-3% commission fees associated with the listing agent. However, sellers might still pay the buyer’s agent’s commission unless they find an unrepresented buyer or negotiate with the buyer to pay for their own representation.
- Use Discount or Low-Commission Realtors: Some brokerages offer the same listing services for much lower upfront fees, often between 1-1.5% instead of the typical 2.5-3%. This reduces the seller’s side commission significantly while still benefiting from agent support.
- Flat-Fee Listing Services: Sellers can pay a flat fee (generally $100-$400) to list their property on the MLS, and other listing services, without using a full-service agent. This provides wide exposure on major platforms but typically comes without agent support for showings or negotiations.
- Negotiate Commissions: Sellers may negotiate with their agent or work with agents who are willing to lower their commission rates, especially if they are selling and buying with the same agent or if the home is expected to sell quickly.
- Sell to Cash Home Buyers or Investors: These buyers pay no commissions, offering a quick sale usually within 1-2 weeks. However, sellers often receive less than market value for their home in exchange for the convenience and speed.
By utilizing these alternatives, or any hybrid, sellers can avoid paying the full traditional 6% commission, potentially saving thousands of dollars depending on their sale price and chosen method. Each approach has trade-offs between cost, convenience, time, and support.