Real Estate Sale Fees

[pjigar]

I sold a house in Ft Lauderdale by paying a flat fee to get it into the MLS. Only cost me $300. It was decades ago, so probably double that now. I had to fill-out all the MLS details, which included the rate I'd pay the buyer's agent. They expected 3%, but I put 2%. They'd call and ask for 3% and I said "no, it's 2%". Most of them still showed the house.

Now that the home buyers can see everything in the MLS online, anything that fits their screen will come up, and they'll say "what about this one?". So that would be awkward for the buyer's agent to say "perfect house for you, but I only get $14,000, so I'm not showing it to you.

You have to answer the phone, and let them in. I had a lock box. I sold it while living in Atlanta, but had my sister go over and change the code on the lockbox occasionally, so I'd know what the agents were up to. The agents didn't like me, hehe, but I wasn't in it to please them.

I like it!

 

[MrsHaloFIRE]

RIght now where I am there are SO MANY realtors and so few houses on the market that I feel fees are DEFINITELY negotiable. We are bouncing around the idea of trading up homes in the next couple years and using the same agent to buy and sell. This will be prob a total of $1M in transactions. You bet your butt I am going to negotiate fees on the sell. If I were selling right now i would DEF negotate fees, bc as you said there are many many cash buyers for each property so its not going to be a struggle to find a buyer which is the hard work, time consuming part. Homes sell themselves before the sign goes in the yard in my neighborhood right now. I would start at 1.5 commission to the listing realtor and see if any reputable realtor would bite. On a big prop on a hot market thats still excellent money. I plan to start there with my realtor and see if she is amenable.

 

[Livefree]

The going rate where I live (South of Boston) is 4%. I sold a property a few years back and negotiated 3% with the realtor, because she sold it on her own, without having to split with other realtors

 

[Sunset]

A realtor in my area puts out one of their yard signs saying "Coming Soon" instead of "For Sale". Without listing it the houses are getting sold quickly so the realtor expenses are minimal and they get the entire fee and dont have to share it. I don't know what the sellers expenses are but I bet it is still pretty stiff.
....

What a slimy realtor.
Those poor sellers may not be getting the best highest bids on their house as the information is restricted. In this market, my neighbor sold his house with a tiny realtor.
He had over a dozen viewers and 4 offers, sold in 2 days.

 

[braumeister]

I had a good experience once with this. It was over 30 years ago and the going rate was 6%, sometimes 7% (the DC area). There was no question of getting it reduced according to everyone I talked with.

The realtor I went with offered 5% to military types, and the deal was that if she acted as your buyer's agent to get you a place to live, she would sell it for 4% when you left the area. That deal was untouchable with any other realtor in the area. It worked out great for me.

Today, I think the rate is probably negotiable in most areas.

 

[freedomatlast]

I sold a home a little over a year ago without listing with a realtor. This was during the time when there was a lot of uncertainty with the pandemic and realtors weren't allowed to show homes in our state. We spent minimal time staging the house, taking pictures and making a short video, then posting it on Zillow for free. I spaced appointments to show it in 1.5 hour intervals.

It sold with an inflated asking price in a day and a half.

With internet savvy buyers, listing in the MLS is no longer as valuable as it used to be. Buyers these days are looking for themselves on various websites such as Zillow. I had prospective buyers tell me how much they appreciated talking with the owners directly and getting answers to questions immediately, instead of going through a realtor who says repeatedly, "I don't know, I have to check with the sellers and get back to you." In our case the buyers were working with a realtor who I offered 3% to do the all the paperwork on both sides and get the deal closed. Even with various county offices closed due to COVID, the deal closed on time with no issues.

There's no way in this current Real Estate climate that I'd pay 6 or 7% to a realtor.

 

[l8_apex]

In 2010 I found and used a flat rate selling agent. He took pics (very good ones), listed on the MLS, and put a lockbox on the front door. I told him he never had to do a showing and that I'd answer questions from buyer's agents. He helped me get through the closing paperwork which I appreciated. So he did a bare minimum, but that was all that was necessary to get it done. $900 to him, 2.5% to the buyer's agent. I later noticed that he gave up on the flat fee gig and just does business same as other agent/brokers now. House was roughly $500k.

 

[Bamaman]

If the market is so hot, why not put a sign "by Owner" in the front yard and see if you get any traffic. You could also advertise in the newspaper for very little $.

If a realtor gets on the deal, pay 2.5% to them.

Our granddaughter bought a house for $205K and sold it 2 mos. later. She cleared her real estate fees and broke even.

My sister's old house had 3 offers on the first day @ $1 million. I cannot say any agent deserved 6% commission on it.

 

[misanman]

The only time we sold a house we did FSBO and it worked well. We had our lawyer draw up the sales contract and some other documents and I think he pointed us to a title company for the closing. Other than that we just put a sign out by the road. We did have to be there to show the house but one of the first couples to see it ended up buying it so there weren't too many of those. Biggest hassle was the real estate agents who stopped by to try to convince us that we should sell through them.

 

[RetireeRobert]

My first two houses years ago I sold by myself. First one in 1978. Had owned it for two years and made 50% gain with no remodel. Second one I sold in 1990, and I not only sold it myself but sold it on owner contract (paid me 10.25% for a number of years). Both sales happened in a month or less and closed smoothly. Third house I chickened out in 2013 with a buyers' market somewhat still in force, and I used a realtor. But I must say, realtor sold it in one week at full price (which I had set), and it closed smoothly as well. Today, I would maybe use a realtor for much higher priced property but would expect to pay a lot less than 6% commission. Or maybe sell it myself again.

 

[Shabby]

I just sold a $1.2MM home with a realtor that is supposedly the best. Made him commit to 2.5% and 2.5% but I would never do that again. The agent does almost nothing. I picked the price. It sold in 7 days. Next time I would use Redfin for 1% and offer 2% to the buyers agent. Such a waste of money. Mad at myself.

 

[pb4uski]

We've done FSBO twice... once for a lakefront lot that we decided not to build on and another time for our long-time main home. I was once a licensed real estate agent and a CPA so I was knowledgable about the process... for both transactions we just used an attorney to do the transaction and as I recall it cost us ~$400. Saved a bundle.

The sale of the main home as FSBO was a bit unintentional. We had previously tried to sell FSBO and had no luck. Then we took a break for a year. We had moved and were about to list it with a Realtor and DW put it out there on craigslist and someone called to look at it and it took off from there.

 

[SecondCor521]

^ We have used agents but never an attorney. All our transactions have been in this state, and there are fill in the blank contracts. I know it is a lot of money and things can go wrong. In our case all has gone smoothly. Respectfully curious question: what do you see as the benefits of an attorney, or is just something everyone does around you?

 

[Livefree]

Our Real Estate Agent charges $850 and is well worth it. We are in the process of selling our Investment property now, and she is dealing with it all.


Money well spent for us.

 

[sengsational]

^ We have used agents but never an attorney. All our transactions have been in this state, and there are fill in the blank contracts. I know it is a lot of money and things can go wrong. In our case all has gone smoothly. Respectfully curious question: what do you see as the benefits of an attorney, or is just something everyone does around you?

In NC, it seems "everyone" uses a closing attorney. Did you fill out the closing statement yourself? Lots of picky details, like prepaids and allocating days between the buyer and seller. Adjustments for down payments and due diligence monies. Getting copies to those who require those. IRS reporting. If it were just the transfer of title document, that's pretty easy, but there's a lot to it, and having someone response for all those details might be worth paying for.

 

[anethum]

I don't really understand why the internet hasn't put real estate agents out of business. The sums of money going to real estate agents and companies is absurd for the effort expended in a seller's market in a HCOLA. I read quite a few years ago that one place in the US where most homes get sold mainly through the internet without being listed by an agent is Madison, WI. I don't live there and don't know if that was/is still true.

In many older neighborhoods in the DC area, most older homes are razed when they're sold and a McMansion is built on the lot. (Exceptions are neighborhoods with "historic" designations.) It is common for folks to sell their homes directly to builders, avoiding all agent fees. I get cards and letters from builders regularly, all wanting to buy my future teardown. I occasionally get cold calls, too. Based on the public sales price information, it doesn't appear that these direct sales result in a lower price for the home.

 

[SecondCor521]

In NC, it seems "everyone" uses a closing attorney. Did you fill out the closing statement yourself? Lots of picky details, like prepaids and allocating days between the buyer and seller. Adjustments for down payments and due diligence monies. Getting copies to those who require those. IRS reporting. If it were just the transfer of title document, that's pretty easy, but there's a lot to it, and having someone response for all those details might be worth paying for.

I have never filled out closing statements, although I have carefully reviewed all of them to make sure they were correct. The prepaids and allocations can be a little tricky but it's not really rocket science - more like a 2 minute accounting lesson plus fourth grade arithmetic along with a decent amount of detail work.

I know real estate is handled differently in different areas. Around here, all of the things you mention are handled by the title company and the title agent. There are fees associated with these services, although in this state they are set by state law, so all title companies charge the same; they differentiate on service I guess. And these fees are separate and distinct from the real estate agent fees.

None of the things you mention are handled by the real estate agent, other than perhaps to coordinate that their 6% fee or whatever is appropriately included in the closing documents and maybe showing up to chat with the title agent. Around here the real estate agents seem to handle marketing, staging, listing on MLS, fielding inquiries, helping with negotiations, managing contingencies (like minor repairs), and general handholding at closing. And with several of those items, they seem to delegate to others (like staging companies and repair people) so they're more like specialized mini project managers.

 

[W2R]

I know real estate is handled differently in different areas. Around here, all of the things you mention are handled by the title company and the title agent.

Here in Louisiana, the title company provides the attorney at closing. Closing is a formal meeting around a conference table and that meeting is conducted by the attorney. Buyers, sellers, their agents, the attorney, staff of the title company, and a representative of the mortgage company attend closing, along with any friends or relatives that either buyer or seller want to include. (The sellers bring donuts and coffee. ) Everyone's ID is photocopied by the title company and returned.

The seller's agent is the one who guides the seller to a good title company to begin with, and also makes sure the buyer's agent and buyer agree with that choice. Both agents answer any questions that their clients may have before closing. Then at closing, they mostly sit there and/or do a little "hand holding" of their clients if they are freaking out (which seldom but occasionally happens and did with me to a minor extent), or interpreting between the attorney's legalese and plain English for their clients, that sort of thing. The attorney hands out MOUNTAINS of paperwork covering every picky detail that anyone, even attorneys could possibly think of. All this paperwork is read, signed, and witnessed in his presence. The seller gets the certified check and the buyer gets the keys to the house.

OK, it's been 6 years and I was pretty excited at the time, so that's all I remember.

In California when we sold our house in 1984, we sent the signed papers ahead of time and I picked up my certified check at the real estate agent's office on the way out of town. No formal meeting at all, at closing. Everything was so casual, as though it was a convenience store transaction instead of a big $$$$ deal. VERY different customs at that time and place, I guess.

 

[SecondCor521]

^ The differences are interesting.

Here the buyer picks the title company (it's one of the blanks to fill in the standard contract that everyone uses). I've used several, and they've all been good. If the buyer doesn't have a preference, the buyer's agent probably picks one that works well for them.

There is no meeting here. The buyer goes and signs their papers, and the seller goes and signs their papers - almost always on the same day, but never in my experience in the same room at the same time. There is approximately 2 inches thick of papers to sign. No donuts, but the title companies all offer coffee or soda and have little candy trays around the office.

What I did my last time or two, which I liked, was to ask for a copy of all the documents ahead of time so I could review them carefully and in detail, which takes a long time. Any errors (and I've found a few) could be corrected ahead of time. Then, when I went to the actual closing, I could quickly look them over, make sure that the bottom line numbers were right and the other documents looked familiar, and then I just signed away rapidly so that closing didn't take all day. Even doing things that way, it still takes about an hour to sign everything.

 

[troutnut1]

I recently retired form a lifetime of real estate, mortgages, and appraisals. It all started trying to save a commission just like you. I had paid $18,900 for my first home and went to sell it a couple of years later for $30,000. Got a giant “Yikes!” when I calculated $1800 for commissions! That was a couple of months wages at the time. And I had just been laid off. So I went to real estate school for several months and spent several hundred dollars of my savings. Several more months and several more hundred dollars I had found an office, bought business cards, joined a couple of expensive boards of realty, and began 12 weeks of training that cost a pretty penny. Finally I was ready to save my $1800! But wait. My broker explained that half of that $1800 ($900) would go to the agent that brought in the buyer. And the franchise we belonged to (Red Carpet at the time) would take 7% off the top of our $900 (-$63) leaving $837 coming to our office. As a broken and office owner he explained we would then split 50/50 leaving me $418.50. But there were some advertising costs he would subtract from that and “errors and omissions insurance” premiums to be paid. Long story short…I sold my home and saved almost $400 after 6-8 months of my life. Not even a buck an hour! But I did go on to sell those little homes by the dozen and made a real killing in the 70’s as a young man. And I retired from a good and interesting career because of that first experience.

I know it sounds like a lot of money. And it really is. BUT in my opinion it is the safest and best way to realize the highest net proceeds from one of the most important investments ion your life. And it gets split far more than you can imagine. Can you do it yourself? Absolutely! But can you do it yourself AND save the commission that would normally be paid to professionals? I really doubt it. Even with a lifetime of experience in real estate, mortgages, and appraisals I ALWAYS hire the best Realtor I can find. And I’m cheap, cheap, cheap! I do it for one reason…they can handle everything for me and send me to the bank with more money than I could by doing it myself. This is mostly due to the magic of the MLS. But other things, like having experienced third parties helping with the negotiations are very valuable too.

Most buyers want to be represented and have a Realtor help them. In my experience the ones that don’t are trying to save the same commission you are trying to save. Time and time again I see FSBO’s selling their home successfully, but it is normally at a below market sale and LESS any commission that would normally be paid to pros.

In an ideal world people could determine exactly what a property would be worth, split the commission savings, and conclude a deal peacefully. The buyer would save 3% for going without pro help, and so would the seller. In almost 50 years I could count on both hands the people who were able to pull that off.

 

[ncbill]

I recently retired form a lifetime of real estate, mortgages, and appraisals. It all started trying to save a commission just like you. I had paid $18,900 for my first home and went to sell it a couple of years later for $30,000. Got a giant “Yikes!” when I calculated $1800 for commissions! That was a couple of months wages at the time. And I had just been laid off. So I went to real estate school for several months and spent several hundred dollars of my savings. Several more months and several more hundred dollars I had found an office, bought business cards, joined a couple of expensive boards of realty, and began 12 weeks of training that cost a pretty penny. Finally I was ready to save my $1800! But wait. My broker explained that half of that $1800 ($900) would go to the agent that brought in the buyer. And the franchise we belonged to (Red Carpet at the time) would take 7% off the top of our $900 (-$63) leaving $837 coming to our office. As a broken and office owner he explained we would then split 50/50 leaving me $418.50. But there were some advertising costs he would subtract from that and “errors and omissions insurance” premiums to be paid. Long story short…I sold my home and saved almost $400 after 6-8 months of my life. Not even a buck an hour! But I did go on to sell those little homes by the dozen and made a real killing in the 70’s as a young man. And I retired from a good and interesting career because of that first experience.

I know it sounds like a lot of money. And it really is. BUT in my opinion it is the safest and best way to realize the highest net proceeds from one of the most important investments ion your life. And it gets split far more than you can imagine. Can you do it yourself? Absolutely! But can you do it yourself AND save the commission that would normally be paid to professionals? I really doubt it. Even with a lifetime of experience in real estate, mortgages, and appraisals I ALWAYS hire the best Realtor I can find. And I’m cheap, cheap, cheap! I do it for one reason…they can handle everything for me and send me to the bank with more money than I could by doing it myself. This is mostly due to the magic of the MLS. But other things, like having experienced third parties helping with the negotiations are very valuable too.

Most buyers want to be represented and have a Realtor help them. In my experience the ones that don’t are trying to save the same commission you are trying to save. Time and time again I see FSBO’s selling their home successfully, but it is normally at a below market sale and LESS any commission that would normally be paid to pros.

In an ideal world people could determine exactly what a property would be worth, split the commission savings, and conclude a deal peacefully. The buyer would save 3% for going without pro help, and so would the seller. In almost 50 years I could count on both hands the people who were able to pull that off.

That simply isn't true...a Realtor wants the sale to close ASAP...they don't make enough on their commission to hold out for extra $ on your home.

When selling their own homes studies have shown they do leave it on the market longer to get a higher price.

Last house I sold (not listed until the fall) my Realtor kept asking me if I didn't want to take the low-ball offers that came in over the winter.

I held out until the next summer for a sales price ~30% more than the average of those winter offers.

 

[harley]

I know it sounds like a lot of money. And it really is. BUT in my opinion it is the safest and best way to realize the highest net proceeds from one of the most important investments ion your life. And it gets split far more than you can imagine. Can you do it yourself? Absolutely! But can you do it yourself AND save the commission that would normally be paid to professionals? I really doubt it.

It IS a lot of money, no matter how it gets split up. And you really can do it yourself without going through all that process you did. People don't necessarily want to become real estate agents, they just want to sell their homes without paying an exorbitant (for the work done) fee. I really don't think the existing system will last much longer, and like anethum, don't understand how the internet hasn't changed it the way it did with travel. But I guess I'll have to wait and see.

 

[Earlygirl]

We sold a house using a flat fee realtor, if you have those in your area, to list the property on the MLS. I think that fee was $250. We did our own paperwork, took our own pictures, but no problem. Then we paid the buyer's agent 3%, but you could offer less. That was in 2019, so the market was not as hot as right now. We had tried FSBO but found many buyers were not comfortable without using realtors. But maybe that won't matter with the market the way it is.



We did sell another, less expensive place, FSBO in 2020 with no issues.

 

[msanniee]

When I sold my condo in San Francisco, the realtor represented both the buyer and me. Lots of plus and minuses in this situation. I had to stay on top of the realtor to make sure my interests were represented, but the commission was 3%.

 

[SecondCor521]

We had tried FSBO but found many buyers were not comfortable without using realtors. But maybe that won't matter with the market the way it is.

With the most popular FSBO outfit in my region, it is common for the owners to offer 3% to buyer's agents, so sellers can list FSBO and their buyers can still use an agent if they want to.

In our FSBO sale, I think we offered 3% to buyers' agents, but the particular buyer we ended up selling to didn't use an agent - they had an agent friend or something IIRC.

I then turned around and bought my current house from a seller using a traditional realtor, but I didn't use a buyer's agent. The seller agreed to a 3% reduction for that, and I did everything myself (although it's probably easier for a buyer to go without an agent than for a seller to do so).