Home sellers typically pay for all realtor fees on a home transaction. When it comes to a FSBO (for sale by owner) property, buyers may have to cover those costs themselves.
Whether you’re selling your house yourself or you’re a buyer interested in a FSBO property, this guide will help you figure out how to handle realtor commissions.
Who usually pays realtor fees?
In a typical home sale (one that’s not FSBO), sellers pay real estate commission costs for both the seller’s agent and the buyer’s agent. They'll usually bake realtor fees into the home price.
How much is a buyer’s realtor commission?
A buyer’s agent generally gets between 2.5% and 3% of the home’s sale price. So on a $250,000 house, a buyer’s agent would collect between $6,250 and $7,500.
Will a FSBO seller pay buyer realtor fees?
When you buy a for sale by owner house, don’t count on the seller paying realtor fees. After all, those who sell FSBO usually do so to save money on realtor fees.
So with a FSBO property, the seller and buyer will have to negotiate who pays realtor costs. Even if a seller doesn’t want to cover the whole real estate commission, they may agree to cover part of the cost. As a buyer, it certainly doesn’t hurt to ask.
A FSBO seller has a few reasons to pay realtor fees
Some FSBO will include a buyer’s commission in the listing to get more showings.
A very motivated seller may be willing to pay realtor fees to simply get the house sold―even if they hadn’t planned on those fees.
Sellers may want some of the benefits that come with having at least one realtor involved. For instance, they may believe a realtor will make the transaction go smoother, or they may want the realtor to draw up paperwork (in states that let realtors handle contracts).
What if a FSBO seller refuses to pay the commission?
Some for sale by owner sellers will refuse to pay any real estate agent fees. Buyers have a handful of options:
- Pay your realtor’s commission out of pocket (2.5–3% of the purchase price).
- Work with the seller to build commission into the home’s sales price. The commission will get rolled into your mortgage, and the seller can use the home sale proceeds to pay your agent at closing.
- Walk away and find a different house being sold with a realtor.
Alternatives to FSBO
A budget-conscious seller can still save on realtor fees with one of these FSBO alternatives.
Use a low commission agent
The easiest way to save on realtor fees as a seller is to simply list with an agent who charges lower commissions. That way, you get all the benefits of an experienced agent without the usual cost.
Low commission real estate companies make it easy to find and work with affordable agents. Our favorite option is Clever Real Estate. Clever’s free service matches you with local agents, including from brands like Century 21 and RE/MAX.
If you find an agent you like, you’ll only have to pay a 1% listing fee ― which means you can save thousands of dollars.
Negotiate realtor fees
If you already know the agent you want to work with, you can try to negotiate realtor commission rates. Even a 0.5% discount could save you thousands of dollars.
Negotiating will take some effort on your part, though, and it won’t always work out. You’re more likely to be successful if the agent expects:
- A quick sale
- Your house to sell for a high price, or
- To work with you to buy your next house
For a surer bet, look for a low commission realtor from the start.