Buying or selling a property can be very expensive. One big expense is the real estate commission. The commissions can typically be around 5% and 6%. These are shared by the buyer’s agent and the seller’s agent.

Real estate agents are skilled negotiators. Most are members of the National Association of Realtors, which represents 1.5 million agents. They are trained to give reasons for not lowering their rates.

A good agent knows the market, prepares homes for sale, and markets them well. However, many sellers question if the fee is too high, especially since they can find home estimates and arrange financing online.

If you find ways to reduce these commissions, your financial results will be better. The following are four approaches to saving on real estate commissions and maximizing your property deal.

Re-negotiate the commission rate.

You can get a lower commission on real estate by having a talk with your agent. The rate may vary from 5% to 6%, but it isn't unchangeable. Most agents are willing to negotiate, especially in competitive markets or when selling high-value homes.

Does some research before you start. First, understand the common commission rates in your locality as well as what is covered by these services.

Do this so that you are prepared in case someone mentions it. If an agent feels confident they can sell your home quickly or if you’re a repeat client, they might lower their rate.

Ensure there is a written agreement. The agreement should indicate the new commission percentage and other related terms of service. A lower rate can save you money, but don’t lose important services or marketing that could affect your home sale.

Negotiate with more than one agent.

Negotiating with one agent can be tough. It’s better to meet with three to five agents. As the seller, you have the property they want to sell. You are in the position to choose whether or not to hire a particular agent.

Ask what services are included. Some agents may reduce their services if they lower their fee. Good agents offer many services. They should explain what they will do to help sell your home quickly and for the best price.

One thing you have to ensure is that the agent will publish your house on local MLS (Multiple Listing Service). It helps in reaching more buyers. Also, confirm if they will help with the closing documents.

Agents need to be paid. They may vary based on categories like membership fees, photographs, or marketing. Point out how selling your home might be easier for them. If your home is in a desirable area or in good condition, it may be less work to sell. This can be used in negotiations.

Be true and honest about your home’s condition. Try getting a third-party opinion for honesty purposes. If you’re also buying a home, you might get a discount if the same agent helps with both selling and buying.

Additionally factor in organic marketing. If you have a large social network, an agent might value your positive recommendations within those groups.

You can explore other sales models.

Sometimes a complete agent is not necessary. There are other methods to selling your house. Some of the discount brokerages charge less than the usual 5% to 6%.

Some offer similar services to traditional agents, while others provide basic assistance. In case you only need someone to handle paperwork, it may save you money. However, be aware of what services are included.

Companies like Opendoor and Offerpad, known as ibuyers, buy homes with cash offers. You don’t have to list the property or do showings. Their fees are usually around 5%, similar to full-service agents. However, they save you the trouble of preparing and showing the house.

There are also new ventures and startups that aim at reducing the cost of buying and selling homes. For example, Listwise offers sellers proposals from agents who work for a low commission and get a higher commission if they sell the home for more than a set price.

Other examples are low-cost full-service providers like Clever matches sellers with traditional brokerages. Upnest allows sellers to receive multiple proposals from agents so that they can compare services as well as fees.

Another example, Redfin, charges a lower seller’s commission of about 1.5%. With buyer’s commission ranging between 1.5% and 2.5%, total commission ranges from 3%–3/5% versus normal rates of between 5-6%. 

Sell or buy without an agent.

To save on real estate commissions, you can buy or sell a property on your own. This is called “For Sale By Owner” (FSBO).

Doing this means you handle many tasks. As a seller, you must set the price for your property. You also need to market it to attract buyers. This includes making listings, scheduling showings, and answering questions. You’ll handle negotiations and all the paperwork yourself.

As a buyer, you need to find properties that match your needs and budget. This means looking at listings, visiting open houses, and making offers. You will manage the entire buying process, from the initial offer to closing.

To succeed with FSBO, learn about the real estate market. Understand market trends and pricing. Know legal requirements, like contracts and disclosures. Learning negotiation strategies can help you get the best deal.

It can be helpful to hire a real estate attorney. They can assist with legal details and ensure everything is handled correctly.

While avoiding agent commissions saves money, consider the effort involved. Selling or buying without an agent requires a lot of work. If you are confident and know the market well, FSBO might be a good choice for you.

When selling or buying property, no one likes to pay commission to those agents! By following these simple tips mentioned above, you can try to save as much as possible on real estate commissions. Sometimes, you can great a great deal with an agent if you are lucky enough!