Updated May 11, 2019
When you’re looking for someone to sell your home, you may not be immediately concerned with the lowest commission rate. You may try to find a real estate agent who can sell your home for the most money. But you also want to save as much money as you can on the sale of your house. So, what is a typical real estate commission?
What is Real Estate Agent Commission?
A commission is a percentage of the sale of your home that goes to both the buyer and sellers real estate agents. This is compensation for managing walk-throughs, advertising for your home, paperwork, and other odds and ends such as overseeing the inspection and appraisal of the home.
The commission rate typically adds up to be about 6% of the price of the home. The buyer’s agent usually gets about 2% to 3% of the sales, while the listing agent typically receives 3% to 4% of the sales. These rates are negotiable, however.
Finding the Lowest Commission
As you search for the lowest commission real estate company, be on guard. Many discount and flat fee realtors work at a lower rate because they provide limited services. For example, a listing service may charge a low 1.5% commission rate, but only list your home on the MLS.
When comparing commission rates, look for the amount and quality of work you are getting for the price. A few ways to do an honest comparison of these rates is to interview the real estate company and ask detailed questions.
There are other options that will help you find the lowest commission rate beyond using a listing service or al la carte agencies. Some other avenues that many consider are selling For Sale By Owner, negotiating commission rates, and working with full-service discount agents.
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For Sale By Owner (FSBO)
Listing your house for sale yourself will save you listing agent commission. Saving that commission rate by eliminating the real estate expert isn’t the way to go if you want to save money and work, however.
That commission gives you access to listing your home on every major home search engine to be found by your relevant audience. It also pays for your home’s advertising as well as scheduling for walkthroughs and paperwork management.
Using a real estate agent also means they have a level of negotiation power that you don’t have. When people walk through a home being sold FSBO, they expect to make a bargain with you on price. Choosing to pay an agent even a low commission will save you money in the long run.
Negotiating Real Estate Agent Commission
We have a great piece on negotiating real estate commission here, but let’s run over the basics. Those in real estate will negotiate on commission if there is an incentive to do so. For example, new real estate agents may negotiate a commission to get some experience under their belt and reviews on their profile.
Real estate agents may also be willing to negotiate their commission if the market is hot and the home will sell quickly. Negotiating commission only works if you have something worth negotiating. If you come to the agent and want to negotiate simply because you think real estate agents get paid too much, you’ve already lost the battle and will get either less quality of service or need to find a new agent.
Full-Service Discount Real Estate Agents
There is a happy medium between getting a high level of service with a low commission rate. The answer is full-service discount real estate agents. When you choose to work with Clever, we partner you with a full-service listing agent for just $3,000 or 1% of the listing price over $350,000. You don’t have to sacrifice service to save money.
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