Kyle Stoner
Kyle Stoner
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Kyle Stoner
Kyle Stoner

    All You Need To Know About Real Estate Agent Fees (And How To Reduce Them)

    If you understand how selling and buying homes work, you know how real estate agents influence these proceedings. Many people work with real estate agents who are tasked with coordinating the transaction. While these agents provide valuable expertise in the selling or buying process, their fees can be insanely high. Licensed brokers, real estate agents, and realtors are typically paid a commission for their services. Unfortunately, the fees can sometimes be so high that sellers don't pocket enough from their property.

    It is true that agents are important, but only to some extent. In fact, if you look at things critically, you might not need the costly real estate agent services to sell or buy a property. This guide will enlighten you on everything you need to know about real estate agent fees and how to reduce them.

    Understanding Real Estate Agent Fees

    Real estate agent fees or commission is a type of earning structure through which agents earn their pay. It is vital to know that commission is separate from salary: unlike a salary, which is paid every month regardless of sales made or hours done, a commission depends on performance. This means that a real estate agent's fee is influenced by a wide range of factors. Real estate brokers receive commission payments which are then distributed to real estate agents. To help you connect the whole chain, here is a summary of what happens when a home is sold.

    It starts with sellers interviewing real estate agents and settling on one they wish to work with, then signing a listing agreement to legalize the deal. The agreement binds the seller to their real estate agent and compels them to pay a commission once the transaction is complete. Then, the real estate agent will list the property in the Multiple Listing Service database and start coordinating with other agents to find a suitable buyer.

    The real estate agent's responsibilities will differ slightly if you are looking to buy a home. You will share key details of a home you would like to buy with your agent and give them time to find one. You will also rely on the real estate agent to book home tours and inspections as well as present your offer to the seller.

    Whether selling or buying, your real estate agent will represent your interests. In some cases, both parties might be represented by the same real estate agent (dual agency). However, dual agency is not legal in some states.

    Everything sounds great until it is time to pay the fees. The agent's commission is calculated as a percentage of the home's purchase price. The amount is deducted from the proceeds of the sale and shared between agents. If the commission rate is affordable, you will get the most out of a real estate agent. Unfortunately, that is no longer the case. Agents are charging exorbitantly high fees that leave real homeowners with nothing to show for it. It is one thing for a real estate agent to help you sell your house, but it is another when they take up a large part of your earnings. This is why you must be cautious when dealing with them.

    Who Pays Realtor Fees?

    One crucial thing you must know about real estate agent fees is who pays them. There is no universal rule for who is responsible for realtor fees. Each real estate transaction represents a unique experience with several possibilities and circumstances — there is room for negotiation. With that in mind, sellers are often left with the role of paying realtor fees. This means that after your home is sold, you will settle the realtor fees at the closing table. This is often the case because the real estate agent fees depend on the cost of your home. Charges vary from one realtor to another, but there are always chances of losing a significant amount of your money. Remember that you can't get out of it once you sign the realtor agreement!

    The standard real estate agent fee is 6% of the value of your home. This means that for every $100 dollar of your home's value, the agent gets $6. You can imagine how many they make for a home that costs $500,000. To be honest, the rate is ridiculously high. Let's not forget that their services are essential in most cases, but do you really need them?

    At Unreal Estate, we believe you can sell your home and keep all the money without having to pay hefty real estate agent fees. Actually, you won't believe how easy it is to sell or buy a home without brokers. You don't need many years of real estate experience or skills to know a bad deal; sometimes, you only need common sense. In fact, when looking to buy a home, you know exactly what you need. It won't take you long to find your ideal home in the so many listings found online. You can also use our limitless real estate listings to buy or sell your home.

    Unreal Estate for sale sign in yard

    Unreal Estate for sale sign

    How To Reduce Real Estate Agent Fees

    No real agent will work for free, so you will have to pay them if you use their services. Given the high rates of real estate agent fees, there is a need to keep them in check. Here are multiple ways you can reduce realtor fees or avoid them altogether.

    For Sale by Owner (FSBO)

    Did you know you can choose to sell your home completely on your own? As mentioned earlier, this is possible and actually the ideal way to do it. You don't have to engage brokers and other parties that are only after profits. With FSBO, you do everything the real estate agent does; designing or creating marketing materials, advertising the property, negotiating prices or terms, and showing the home to a potential buyer. Thankfully, there are many services available for FSBO sellers, including websites with FSBO listings, flat-fee MLS listings, and access to professionals for advice.

    However, you will have to pay a small fee for either of these options. If you are looking to sell your home through FSBO and the buyer works with a realtor, you will negotiate the sale terms. In most cases, however, you will have to pay the real estate agent's commission. Thankfully, there is a good chance of not paying the commission at all, as statistics show that about 20% of home sales are direct transactions. These transactions don't involve a real estate agent, and involved parties complete the transaction without them. Therefore, if you find the real estate agent fee too high for your liking, you can opt for FSBO.

    Negotiate the Commission

    A good way to reduce the agent's fee is by negotiating terms. Before working with a real estate agent, you should interview at least three. This will help you get an agent within your budget and guarantees the sale of your home. During the interviews, remember to ask about their commission rates and see if you can afford them, and don’t be afraid to ask for a discount. You might find agents that are comfortable with significantly lowering their commission rates in the right scenario. As an example, if your home is in excellent condition and can be sold easily, a flexible agent may be more likely to accept discounts and reduce their commission.

    You should also know every essential aspect of your home and the real estate market. Find out the market price of homes like yours in the area to make the process easier. In fact, if you have a beautiful home that is in high demand, you can use basic real estate knowledge to sell it without a real estate agent. You can set its price at an amount you find lucrative and watch prospective buyers flood your inbox. A real estate agent might be the right option if your home is hard to sell, but not when it is pretty easy. Therefore, evaluate your home and determine how hard or easy it is to sell it. If you will need an agent, ensure you negotiate the commission. 

    Dual Agency Sales

    As mentioned earlier, a dual agency is when a real estate agent represents both the buyer and the seller. However, dual agency is illegal in some states, so verify that your state permits it. Some states also require agents to disclose this information to both parties before proceeding with the transaction.

    But how does dual agency help reduce realtor fees? If your agent works with sellers and buys a home from someone they are already working with, you can request a discounted commission since the agent is earning from both ends of the transaction. While this is a great way to reduce agent fees, it is not highly encouraged seeing as the agent might not fairly represent the interest of both parties.

    One major setback with a dual agency is that the agent will provide services depending on how much you pay them. If you are selling your home and offer them a lower commission, they might be less interested in showing your home to potential buyers. This means it will take much longer for your home to be sold. The agent might prioritize other homes where sellers are paying higher interest and only work on yours when there is no other option. You can imagine how inconvenient that can be. Therefore recommend that you work on selling or buying your home on your own. You might be surprised at how fast you will sell a home even without an agent.

    All you need is basic knowledge of the real estate market and an accurate price valuation of your home to sell it. If you have to proceed with a dual agency, confirm that the agent is committed to providing fair services to both parties. You can also counter-check with the other part to validate agent information.  

    Go for the Best Possible Value

    There are many experienced brokerages and real estate agents to choose from. Each one of them is different, and it is up to you to find the best value for your money. Whereas some will be completely inflexible on pricing and commission, some will be open to negotiating and providing a service that suits your goals and needs. It is better to work with such agents that understand this is your home, and you deserve to keep as much money as possible from its sale.

    You can also find agent-matching services and discount brokers that help you find affordable agents. Before settling on a preferred agent, you should interview at least three of them. This will help you find flexibility in terms of customer service and pricing. By doing so, you reduce the cost of agent fees in your real estate transaction.

    Consider Working With an Up-Comer

    Newer real estate agents that haven't been around for too long might be open to working for fewer rates. While such agents pose the risk of inexperience, they are more concerned about building their reputation and will do everything to deliver quality services. Newer real estate agents are concerned about positive reviews, increased sales, and customer referrals. With all this at stake, you should expect reliable services from them. The best part is that you can offer them a lower commission.

    Although this is a great way to save money on real estate agent fees, proceed with caution. Some agents are relatively new and could cost you big time. Instead of taking that risk, it is better to sell the home by yourself. As a homeowner, you know the sacrifice you had to make to buy it. This means you won't be willing to settle for less, no matter your situation.

    Avoid or Reduce Real Estate Agent Fees

    Any real transaction involving agents leads to you paying real estate agent fees. Even though the fee is justified, it shouldn't be too high that it significantly lowers your earnings. As the person selling a home, you deserve to keep every penny from the transaction. If possible, you shouldn't work with a real agent at all. If you have to work with an agent, make sure their fee is very affordable.

    If you’re ready to sell your home, visit to start a listing on the MLS for free, or find your perfect home at

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