Realtor Fees

Updated on March 01, 2014
J.G. asks from Chicago, IL
33 answers

We are soon (less than 2 weeks) listing our house. I'm trying to figure out how I want to negotiate with my realtor for her fees. She told me she has a few clients looking for houses in my school district. Can someone tell me what happens to her fees if she is the agent for both the seller and buyer? Can I set up what I'm willing to pay in the contract if this case arises?

Depending on how much we get for this house, I think the realtor fees are really going to be a factor in me getting what I need out of this house. I know I'll get a decent amount,but with realtors taking 5-6%, and then closing costs being 10k, I may not have enough equity for a downpayment. We will be close, really close, I think, and we can bring more money to the table, but I honestly do not think the realtors should get giant sums of money for such little work.

Tips in negotiating realtor fees? I know we can negotiate these, so I want to be prepared to get the best deal.

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So What Happened?

I am specifically concerned with dual agency and asking her to save us a percent or two. I'm OK with her being a dual agent, by I'm not OK with giving her the full amount.

Hubby won't let me do FSBO. With three small kids, he is most likely right. I don't have the time.

Thanks to all the helpful responses! To those of you who went negative, I guess I'm annoying or something, but thank god for people like me that ask questions or this place would be dead!.

We are pre-approved, btw. We have a very old realtor -one of the best in the area- that has been showing us houses. We will list with her,and I know she will try to dual sale. When she saw my house last fall I could see dollar signs in her eyes. She has done very little for us thus far. I find all the houses we want to view, and she hasn't had to push me on anything. I called her this morning and said called me her dream client. She stands to make tons of money, and she doesn't really have to do much. She thought my house was immaculate before my most recent declutter -I removed a good 40% of our stuff and it's in a storage unit. Her word, not mine, so I just want to be knowable about my options before we do a contract. I'm stunned that my curiosity is perceived as stress and snobbery. I have no problem paying for quality, but I am frugal and like to explore all my options. I never shop at walmart for political reasons, and am stunned that my question brings such thoughts to mind. I always find it best to be knowledgable about things before signing contracts, and I know for a fact it's all negotiable.

I live in a very wealthy area. My small house is actually worth a bit of money. No, we are not "rich." But we are on the high end for our area. Hubby makes 3xthe average, so my small house is worth a lot more than you may think. In fact, we will be one of her higher end listings. It's an entry level house in a very good location. It's a lovely home. I wish I could think of thousands as pocket change, but after years of eating beans, we watch our money. We are a single earning household, living with "rich" people nearby. With our purchase, our realtor will make between double digits. I know she doesn't think this is pocket change. And people say I'm a snob. What haters.

Btw, by preapproved, we do in fact have access to a mortgage. It's a credit union. And we are talking 20 down. I want to use all equity.

Featured Answers


answers from San Francisco on

A good realtor is worth every cent and won't negotiate her rate, at least that's how it works around here. You may be able to list with a newer, junior broker at a slightly lower rate but unless you know the person well I wouldn't do it. You get what you pay for.
If you're cutting it so close you might want to wait a while. There are ALWAYS unexpected costs when it comes to buying and selling, you need a cushion.

17 moms found this helpful


answers from Pittsburgh on

I'd like to hear from someone successfully negotiating realtor fees. I hear it's theoretically possible, but I've never actually heard of it happening.

If a realtor is both the buying and selling agent, then they an collect the full 6% (3% as the buying agent, and 3% as the selling agent).

If you live in a hot neighborhood, is there a reason you don't do it as FSBO? We did that once. We got a real estate lawyer to write the contract and do the closing. It was far far less expensive than paying 6% to the realtor.

6 moms found this helpful


answers from Los Angeles on

Usually each realtor - buying and selling - would get 3%. When a single agent represents both parties, they usually take 5%. I doubt you could get any lower than that.

3 moms found this helpful

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answers from Columbia on

Wow. How insulting to realtors and all the time, effort, work and thought they put into what they do.

I think you need to talk with your realtor about the fact that you don't want to pay her full price for her services, so that she can decide whether or not she wants to provide you with those services. Before you USE her to list your home and sell it.

1. If you don't have enough equity to make your down payment and pay for your realtor, perhaps you should wait.
2. Work on some humility. Your posts are severely lacking in it.
3. It's not your curiosity that is perceived as snobbery, it's the actual snobbery. This isn't the first post of yours that most of us have read. You do a lot of "Oh, we're 'a higher income family," or "I homeschool my kids" which is just fine, but you tend to come off as having an "I'm better than people who have lower income or who don't homeschool" sort of attitude. Just something to think about.

20 moms found this helpful


answers from Portland on

You felt that the hourly rate for your time (for babysitting, remember) should be $20 per hour. This requires a LOT more knowledge, expertise, effort and connections than babysitting does. Consider what others have said below-- this person makes a serious financial investment in their business and in serving the client. You wanted to be treated like a queen for the bother of your time and I'm guessing the realtor you end up working with would also appreciate similar consideration. Golden rule and all...

17 moms found this helpful


answers from New York on

I'm sorry J. but "dollar signs in her eyes"?? You wrote you live in a 3 bedroom 1k square foot ranch. Given it's not 1k square feet in NYC, how much is your house even worth? And you wrote you're spending less than $1mm on your next house. To some of us, those are small numbers. Likely your realtor also has worked with much bigger numbers. "Make a tons of money off you"?? You're not buying and selling millions of dollars of property!! And realtors have expenses. You're only looking at their gross commission. So try to have a little perspective... And if you have one of the best realtors in the area, why would she negotiate? Find another one who is just starting out. I think ziprealty agents are cheaper. I don't disagree with wanting say a 5% vs 6% commission or maybe get a bit more off if your house sells quickly or something but I also think you're losing a bit of perspective. And as someone said, you always say what a high earner your husband is and how much money you save for retirement etc yet you're so stressed about the downpayment? I don't get that. Even if the agent shaves some off her commission, what does it save you? A few thousand even $5 thousand? That's how tight your downpayment is?? That's tight! And there's a mismatch in caring that much about single digit thousands of dollars and the idea that your agent is making tons of money off of this...

15 moms found this helpful


answers from Washington DC on


There's a lot going on in your post...there's more than just fees.

Since you've been here a while - and I've read and responded to many of your posts and vice versa...I'm reading more...

1. You have stated many times in the past that you are a saver...even your husband says you save too much you have stated. So I'm confused.

2. You've also stated that your husband is a "high earner" - that's different in everyone's book....and your definition of "high" - keep in mind there are some people on here who barely make $50K a year and for them - that's " a lot".

3. If you cannot afford the down payment on a new home - then I would suggest you wait until you can.

4. I would strongly suggest that you be pre-approved for your next home so you don't have to haggle with paperwork when you have found your dream home.

5. Selling Real Estate is NOT "little" work. They have to put up with rude people, take people around and show them houses, spend Sunday's for an Open House, finding people who might be interested, maybe hosting a Broker Open House, getting your listing in the MLS so it gets attention, marketing...there's a LOT that goes into being a Realtor. And keep in mind? They don't close on houses every day - even in a seller's market and they pay taxes on that commission they get...usually even if they connected to a company like Century 21, etc. they do not get benefits. So once they pay their taxes, their desk fees (if they are connected with a company they may have to rent a desk from them), etc. it's not a lot - considering how much time they are putting in to selling your home. So if you sell your home for $300K - and you are paying them 6% - they will get a commission of $18,000. Yes, it sounds like a lot of money. but keep in mind the taxes (which could be $4K for federal, state, local) and fees, etc. they have to pay out of that...

Typically - a selling agent gets 5% or 6% in commission - that is the final sale price of the home. Here in Virginia, the selling realtor generally splits it 50/50 with the buyer’s realtor. Some Realtors are actually charging less so that people will go to them to buy/sell.

You want to negotiate your fees? Then you will get what you pay for. You want Neiman Marcus but pay Wal-Mart prices?? You will end up being a VERY UNHAPPY person.

Find a real estate agent that knows and understands your needs.
Find one that you get along with.
If you can't. Then I would suggest you do a FSBO and find out just how much "little work" is involved in selling a home...

Good luck!!

13 moms found this helpful


answers from Chicago on

Our realtor has already pumped well over 50 hours into showing us at least 25 houses. So far, he has only gotten a fairly small commission for his efforts, as we re-evaluated our priorities and shifted from buying our long-term home to buying another investment property, a difference of roughly $500k. This is how they make their livings--marketing, networking, driving, advertising, fruitless showings, coordinating appraisals, inspections, helping to secure financing, etc. There are so many things that go on behind the scenes, but I ultimately think it is worth it.

Just make sure that you are choosing an agent whose judgment you really trust--who is willing to work to get you top dollar for the sale, not just to get A sale.

13 moms found this helpful


answers from Appleton on

I've never heard of a realtor negotiating their fees. Why should they? It is their business and expertise to sell and buy homes. There is a reason you are not doing it yourself, right?

I've noticed you have asked many, many questions the last couple months about looking for homes, selling your house, getting things done around the house, etc. It seems very stressful for you and your husband. Maybe the timing just isn't right for you to buy a new home. Wait till you have enough money to make the whole process go smoother and easier.

13 moms found this helpful


answers from Cleveland on

I get where you're coming from but if you take a step back, unless she only shows the house to her clients and/or does a lousy job of showing overall in order to fend off outside bids and keep only her clients as the top bidders, it shouldn't really matter if it's her client that ultimately buys the house. Lord knows how many houses she's had to show these buyers already and if yours happens to be the one they want and are the highest bidder on, doesn't mean she hasn't earned that commission... Her client will only buy your house if the client is the highest bidder, right? Also, she'll want to sell your house quickly so if she talks her clients into buying yours and paying top dollar to get in done in her own self interest, that's in your interest too, right? We did get our realtor to cut $5k off of her commisson when we bought our house. That was a little less than 1/2 a percent of purchase price. She did it bc she also represented selling our then current house and I found the house we bought. She showed us only 2 other houses. So the purchse of our house was super easy and nontime consuming for her. Will this agent represent you buying your next house too? If so, maybe you could say if we buy one of the first 5 houses we see, shave off xyz... If she's already shown you 5+ houses, then probably a no go.

It does sound like you're cutting the new home purchase really close though if this matters that much. Maybe too close which I don't get bc you've mentioned several times your husband is a very high earner and he gets really big bonuses etc. If you have to wait for his bonus this year, maybe wait for it then before you buy.

ETA: you need to look at total dollars too earned by her. Your house is under a million I gather from past posts. So not like it's a $5mm house and she's earning $300k in one transaction. if your house is $500k, that's $30k max in commissions. Part of that goes to the agency. Her take for selling your house is probably around $8k. That's not that much money for how much work she likely puts in... And realtors don't sell houses every day. They need a certain amount to make a reasonable annual income and stay in business.

12 moms found this helpful


answers from Dallas on

Realtor fees are non-negotiable here. If you can't afford to have a realtor, I'd say hold off on purchasing because they can save you a lot of time, money and future headaches. You are paying for their professionalism and knowledge. Do I like to pay realtor fees.... goodness no.... but I do like the outcome which typically has far fewer surprises than no realtor or cheap realtor.

If a realtor around here even suggested that fees were negotiable, my red flag radar would go off. You need someone highly ethical and who will look out for your best interest.

A lot of stuff goes into real estate and it is not worth it to hire sub-par just to save a buck.

Best wishes to you!

12 moms found this helpful


answers from Chicago on

As someone who works for a real estate company in IL just a few things. Yes you can negotiate but remember a few things on this.

1. They do not get the full commission. It is usually split with the buyers agent so unless it is dual agency they will only get half.

2. They don't even get that amount, most have to split with their brokers and it can be any type of split from 50/50 to 90/10 even occasionally 100% (not common)

3. They spend a ton of money to maintain their license, fees to the broker etc. I know for our company a realtor can easily spend thousands of dollars just to maintain their license, broker fees, MLS fees, NAR dues etc.

4. It is a lot of work and unless you get a crappy agent who does no work on it, there is a lot that goes into it.

5. Everything is negotiable but it is usually not up to the agent. They have to have their broker sign off on any reduced fees. You may be able to negotiate 3-5% but that is really low these days.

12 moms found this helpful


answers from Albany on

Realtors here get 6% (3 and 3), it is not negotiable. If you want a lower rate you go with one of those assist to sell/buy deals, or FSBO.

And frankly, if you do not have at least 5% cash down on a property BEFORE you sell your current house, you really can't afford it. Sorry.


12 moms found this helpful


answers from Anchorage on

If you don't think a realtor is worth the fees then don't hire one and do the work yourself, since it is so little work and so easy (which is not true, if they did so little work everyone would just sell their own homes). It seems like people more and more think they should get something for nothing. And no, you don't get to dictate that they get less if the buyer happens to be a client of theirs, you are still getting what you are paying for, them selling your house.

11 moms found this helpful


answers from Houston on

The fees are their paycheck. I doubt your paycheck is negotiable.
Seriously, most realtors don't budge on that. Unless you've bought/sold many properties with them or YOU find the buyer, or you purchase new construction. Those examples have saved us some money with realtors.

11 moms found this helpful


answers from Chicago on

First I want to say OUCH, that was quite the slam on Realtors. Thats like saying a homeschool moms job is easy. You obviously have no idea what your talking about. Even if you are the 'dream' client, she will have a lot of work to do for you that you don't even know about.

Also, you live in Chicagoland. Do you realize how much her commission check will be taxed? Then she has to pay her office fees., licensing fees etc. How about our $4 a gallon gas.

You can typically get realtors down to 5% in Chicagoland. You may get her down to 4% if she ends up finding a buyer for your home. All you have to do is tell her that since the equity is going to be quite low and since you are using her for your buy, will she negotiate down if she is the buyer/seller on your home. She will say yes or no. Be prepared before she comes over and make a decision if you will continue with her if she says no.

Also realize that if she is the "best", she may not lower her fees, be prepared.

BTW don't you live in a very tiny 3 bedroom, 1000 sq ft home? Not sure how that's dollar signs.

9 moms found this helpful


answers from Los Angeles on

There is no way to know when writing a listing contract if your realtor with do both sides of the deal or not. If they are listing the house for you, they should be getting 3%. You are underestimating the amount of work a realtor does to get your house sold. On average I spend $2000 in marketing and 50 hrs. of work per listed property. Plus, the brokerage takes between 30-50% of the total commission, depending on the realtor's agreement with them….

maybe you could have a verbal agreement with your realtor that if she does both sides of the deal, she will shave off 1% for you...

9 moms found this helpful


answers from Amarillo on

So, my question to you. Is that listing going to be an exclusive listing or a listing that is MLS (multiple listing service)? If it is exclusive it won't get much showing but it if is MLS it will get a lot more.

Just because you "only" see the realtor a little bit does not mean behind the scene they are not working hard to sell your home. As another put it they are working with adjusters, bankers, other realtors, advertising, photography, internet sites, inspectors, yard maintenance and the like. If you think it is so easy, then you sell your house for the set amount of money you want.

Remember just because you list a house at a certain amount does not mean that the buyers are always willing to pay you that amount. I have told my clients in the past that the amount shown is a suggested amount. It is up to the buyer if they want it that badly or not. Call what it the traffic will bear. Otherwise you could be sitting on a home sale for up to a year or more even if it is in a "hot" market. There are two homes in my neighborhood that were listed over 6 months back that now have the reduced price tag attached to the listing sign and still no takers. Eventually they will sell by not at the asking price.

the other S.

PS You do get what you pay for. Younger realtors do not have the experience of the older ones.

8 moms found this helpful


answers from Hartford on

If your realtor is any good at all, she won't negotiate. She'll move on to the next people that are selling their home and needing to buy a new one. You've got a lot less control here than you think you do because it just doesn't work the way you think it does. There are plenty of posts below me that explain why.

I just want to mention that being pre-approved to buy doesn't really mean squat. It's an opinion by one lender of what you might be able to borrow to afford a mortgage. It's not a guarantee that you'll get any sort of mortgage approved at all. It's a number you can go out there with thinking, "This is around what we think we can afford so we can't go over this amount" and that's about it. It's not ever to be taken as actual approval nor as a guarantee that ANY lender will actually grant you a mortgage.

From the sound of how tight your budget is, I think that if you can't afford both an excellent realtor and a minimum of a 5% down payment (10% would be so much better) then you shouldn't be buying a house at all. You should be waiting until you can afford it.

7 moms found this helpful


answers from Salinas on

Around here realtor fees are non negotiable in most cases.

You may also shoot yourself in the foot even if they agree to go down a percentage point in the case of representing both you and the buyer. They'll have little incentive to show your home to the buyers they are already working with since they'll be making a lower commission. They can get the 3% by selling your house to a buyer with another agent then find homes for their current clients where the buyer did not try to negotiate a deal.

Not sure of the cost of a home in your area but if the realtor fees are the only way you'll get what you need out of the house I would plan for the worst case scenario. In my experience you rarely get exactly what you want in selling a home and it's downright expensive when all is said and done.

7 moms found this helpful


answers from Minneapolis on

Hi J.,
All I have to say is haters are going to hate!!!
Questions are good, that's how you learn and find things out! We are not all realtors and don't try to be, I am very surprised at some of the answers here, thanks for all of the support....give me a break! Lets show some compassion already!!

6 moms found this helpful


answers from Columbia on

Here is an article - it's about luxury condo real estate, but essentially says that you should be able to negotiate a 1-2% reduction in commission.

Just do it up front. In Illinois you have to sign a consent for dual agency, so when you get to that form then you talk about fees. You could say "I know it's customary with dual agency to reduce the overall fee by 1-2% - what does your brokerage typically do?" and go from there.

5 moms found this helpful


answers from San Francisco on

Most realtors are okay with lowering their percentage to 5% if they are double-ending the deal. I would advise against offering any lower of a commission under any other circumstances, however. You should understand that your realtor pays fees (a lot of them) to be licensed, continue her education (which is required for licensing), she pays MLS fees so your home can be listed on the local MLS listings, and she spends her time and money putting your home on the local broker tour, holding open houses, buying ads in the real estate section of the newspaper, paying a professional photographer to take pictures of your home, etc. Then when it's in escrow, it's the realtor who pushes the whole deal along, keeps tabs on all of the paperwork, etc. She is earning the money. There are many ways in life that you can save money - cheaping out on your realtor isn't the way I'd recommend.

ETA: Penny N, are you serious? MLS fees in this area are upward of $1200/year. Clearly you don't have a brokerage license!

5 moms found this helpful


answers from Miami on

Well here, it is 6% total - 3% to each realtor not 6% to each realtor. When we sold our last house our realtor knew how tight we were to being able to get out of it. She and the buyers realtor each agreed to lower their fee in order to get the deal done.

I would say before you sign the listing agreement, ask her if she does a discount for being dual agent. If so, it should be stipulated in the listing agreement.

BTW, my realtor worked very hard. It took her 7 months to sell our old house. She also negotiated with the buyer (who was purchasing it as a rental property) to allow us to rent it back for 3 months and month to month after while we keep looking for next house. Then she showed us at least 30 homes and we offered on 3 homes plus ours before we finally bought.

Good luck! Oh, if you haven't listed than you don't have a realtor yet. Interview at least 3 asking them the same questions. Not sure why you have settled on one yet if you haven't signed a listing agreement or discussed fees yet.

5 moms found this helpful


answers from Los Angeles on

Some agents will NOT negotiate their fee. Especially established ones.
Keep inundated if your house offers a lower commission percentage, agents won't be as anxious to show your home.
Pay the set commission. It's CDB.

ETA: 10K closing costs? Really? Odd.

5 moms found this helpful


answers from New York on

Check around for different agencies. There's 1 in my town that only gets 5% instead of the usual 6%. Their agents are well known and very professional. Unless your house is very expensive (where the agent would be making a lot of money) then it's really not to the agent's advantage to save you money. Although your house is in a good location inspections might show big problems that may make the selling process a nightmare.

4 moms found this helpful


answers from Philadelphia on

Years ago we did a FSBO. I would never do it again and ultimately had to use a realtor, but what that did do was bring realtors to us that were willing to work for a reduced commission. Most of the realtors came from Remax. We ended up paying 2.5%to the buyers agent. Our realtor's commission was 1.5% plus $500. You could also negotiate with the realtor giving them your business. Hire them to be acting as your agent when you purchase your next house. (We bought new construction and did not use a realtor). In hindsight we saved the builder of our house a commission fee when I probably should have found a realtor and asked them to represent us and to split the commission with us. They would have had to do no work since we found the house etc.

4 moms found this helpful


answers from Lakeland on

First, most agents wont be helping the buyer and seller it is unethical for any of them to do that. Second, when there are two realtors they split that 5 or 6% commission and don't ask for more.

You can ask about lesser fees but most often the broker they are working for wont allow it. You can negotiate lesser fees if you recommend a buyer, example if you meet someone or have a friend that wants to purchase the home.

You could always sell it by owner but you wont have the advertising access that the realtors do and it can cost just as much with lawyers and closing fees.

3 moms found this helpful


answers from Boca Raton on

I don't think it's wrong of you to be thinking about this at all. We live in a high value area, too, and it's BIG money for realtors and for us sellers. Nobody should be cavalier about tens of thousands of dollars.

My only caution is to think about it from the agent's perspective. If it's a tough market your house might be lower on her list of priorities.

There's a fine line between being smart and being realistic about the value of your realtor's work (and it is work and $$$ on their end).

When we bought our house our realtor and the other realtor both offered to cut their fees to make the deal happen. I don't think it hurts to ask - but again, be sensitive.

Good luck.

3 moms found this helpful


answers from Santa Barbara on

Just ask. Show her your bottom line as to what you need in your pocket after all is paid out.

I would focus more on making this 'good' realtor get more for your house if it is so desirable.

Something interesting I have learned is the realtors do not get the 3%. I will pick a large company as an example. Coldwell Banker gets a cut and negations a percent with the realtor. Beginning realtors might get 1% and more successful may get 1.5%.

I also have a lot of respect for realtors who have refused to lower their commission. But then again, if your house is an easy sale that many realtors want, it does not hurt to ask. This question could help you decide which realtor is best. One that caves on her own money or one who can stand up for herself and explain it in a way that convinces you to think she (or he) is worth it.

3 moms found this helpful


answers from Washington DC on

i don't even think dual agency is legal here. how can any agent realistically negotiate in the best interest of both her clients?
maybe in plato's republic. but not the litiginous and profit-driven atmosphere of the good ol' US of A.
3% each is pretty standard in these parts. you might be able to knock it down half a percent or so. but check into the dual agency thing in IL>

3 moms found this helpful


answers from Albuquerque on

It's not unheard of to negotiate realtor fees, especially if she's also going to be the buyers agent on your next house. I've had realtors offer 5% (3% goes to buyers agent) in these cases, and that's without the dual agency. I would be careful with the dual agency thing though, how do you know whose interest she's looking after? So, I would just ask her, leave out the dual agency thing but remind her that she'll also be your buyers agent. Also, I just want to add, realtors do a lot more than just a little work.

2 moms found this helpful


answers from Denver on

ETA: Wow, you got some really negative responses below! There is absolutely NOTHING wrong with asking a realtor to renegotiate her fees! It is done here all the time. And if you know there are already several interested buyers in the area, then your realtor is doing nothing more than spending a half-hour taking pictures, and then uploading them to MLS (which, contrary to belief below, does not cost anything). Other realtors will show your house to THEIR clients. The selling realtor really doesn't do a ton, and it isn't an insult to ask for a negotiation of fees, anymore than it's insulting to negotiate that actual home price with the seller. Silly mamas!

If you are really in Illinois, there is no way closing costs are $10K. Where did you get that information?
You can offer to do buyer concessions for closing, and cap that amount at $1500-$2000. A lot of sellers do that.
You can certainly ask the realtor to lower her commission rate. She doesn't have to though. You can also interview other realtors. My family member is a realtor, and I know that she can do it for free, so in terms of what you can negotiate, you can ask for just about anything. A lot of realtors will agree to a total of 4%, if they are the agent for both sides. You can have that written into the contract. You can also tell her you aren't willing to pay more than 5% total commission to both sides, regardless of who represents each side. She and the buyer's agent can split it however they want. You can also agree to use her on your buy-side, so she knows she will get commission off of you twice.

2 moms found this helpful
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