How to Reduce Real Estate Commissions

The standard real estate commission of 6 percent can persuade homeowners to raise their selling price or reduce their profits. Neither are attractive choices. The brokerage industry is feeling the pressure to lower their rates, because today's consumers have several options to limit a real estate agent's commission.

Instructions

Difficulty: Moderate

1. Sell the property yourself. Show the property, qualify buyers and complete all the paperwork. There is much research involved in listing a property "For Sale by Owner." Commit to the process and find the ideal buyer.
2. Work with a "Flat Fee" agency. These fees are usually much lower than a commission and the agency does the hard work like advertising, negotiating contracts and the other required paperwork. This option saves time and potentially thousands in real estate commissions. Agency representatives are available to answer questions and offer advice throughout the sales process. Sellers show the property to perspective buyers; the agents do the rest.
3. Find a discount broker. Most are independents unaffiliated with large corporations or franchises. These brokers provide a full range of services like listing in MLS, yard signs, conducting open houses and completing all required transaction paperwork. Real estate commissions are often less than 1% of the sale price.
4. Ask traditional brokers for a discount. Many full service agents give repeat clients commission discounts. Traditional brokers often negotiate reduced rates for a client that uses their services to both buy and sell a property. Or you can leverage one of the above options to negotiate a lower price.

Tips & Warnings

• “Flat Fee" agencies usually contract to show property for an additional fee.
• Many real estate agents won't show properties listed "For Sale by Owner," as their commissions not guaranteed.
• Discount brokers charge additional fees for advertising.