Should I save money on a Realtor when I sell my home?

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Ask a Lender
January 26, 2017 | Updated September 20, 2017


Key Points

Choosing between a full-service or discount broker

  • Full-service brokers typically charge around 6 percent commission.
  • Discount brokers offer between 3 percent to 4.5 percent commission.
  • Commissions are negotiable — see if you can get a lower rate.

Selling your home can be stressful, and a real estate agent should be a rock in the midst of the storm. Many factors go into choosing a real estate agent, but one of the first questions you should ask is whether you should choose a full-service agent or broker, or a discount agent or broker. Although either option can help you sell your home, you should understand the advantages and disadvantages of each option before you make a final decision.

Full-service brokers

Full-service brokers tend to charge higher commissions than discount brokers — usually around 6 percent — and usually don’t charge any fees beyond that. The broker’s services include marketing of the home, promotion, advertising (including by direct mail) and posting information on the home in the Multiple Listing Service (MLS). They often will make themselves available to show the home to potential buyers and buyers agents, as well.

Discount brokers

A discount broker works under a reduced commission that could range anywhere from 3 percent to 4.5 percent. Some discount brokers may offer services similar to those of a full-service broker, or they may offer services in exchange for fees.

Fee-for-service real estate brokers are not usually considered discount brokers, but some consumers consider them to essentially be discount brokers because of their low cost. These brokers charge fees for specific services, so the more services they perform, the more they will charge you.

A discount broker may only list your home on the MLS, leaving you responsible for marketing the house, showing it to potential buyers, etc.

Which should you choose?

How should you decide which type of broker to go with? Although it would seem obvious to go with the cheaper discount broker to save money, consider what kind of real estate market your house is in.

If the home is in a seller’s market with buyers practically lining up with offers, a discount broker may be sufficient for your needs. If the market is more competitive for sellers, however, and buyers are more difficult to come by, then going with a full-service broker may give you an edge over the competition.

If you enjoy or have an aptitude for marketing, you might consider marketing the home yourself, if you have the time to do so. In that case, a discount broker might make the most sense, as they can help with all the paperwork and finer details of selling the home, while saving you some money via the lower commission rate.

Speed is another factor. If you are trying to sell your home quickly, the breadth of services offered by a full-service broker may be your best bet.

Keep in mind that real estate commissions are negotiable. Just because a full-service agent typically charges a 6 percent commission doesn’t mean you can’t talk them down to a lower percentage that works better for you. They may not agree to the lowered rate, but it doesn’t hurt to ask.

Selling a home can be an expensive endeavor, and any money you can save is more you will have for a down payment on the mortgage loan for your new home. Going with a discount real estate agent might save you some money, but you will also have to do more of the legwork to market and sell the home. Consider whether the savings are worth the extra headache; if not, a full-service agent could be worth every penny.

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