Selling Your House Yourself? You May Still Get Hit With Real Estate Commissions. Here’s Why

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Selling your house on your own can help you save on commission for a seller’s agent, but you’ll likely still have to pay a buyer’s agent. Read on to find out why. 

If you have decided to list your house for sale, you’ll want to make sure you set the right price and hopefully walk away with enough of a profit to pay off your mortgage loan in full. You will also need to make a decision about whether to hire a real estate agent to help with the sale or handle it on your own.

Hiring a real estate professional has some benefits, as you’ll get expert advice from your agent. But, you will have to pay a commission to your seller’s agent, so this means less money ends up in your bank account. If you want to avoid paying this fee, you may decide to sell your home yourself.

Just be aware that even if you do sell your home without an agent, you are likely going to get stuck paying at least some agent’s commission. Here’s why.

You can’t usually eliminate the buyer’s agent’s commission

When you enter into a real estate transaction as a seller, you do not just have to pay commission to a seller’s agent if you use one. You are also typically expected to pay commission fees for the buyer’s agent who represents the people who purchase your property.

If you list your house yourself, you will very likely end up selling it to a person who has employed a real estate agent to help them find a house. Most people use buyers’ agents, so it’s very unlikely that you’ll find an unrepresented buyer who comes to the home with no agent. Their agent is going to have to be paid, and you are most likely going to be the one that has to do it.

There are two reasons you’ll likely get stuck with commission fees for a buyer’s agent. First, even if you listed your house yourself, you’d likely need to get it onto the Multiple Listing Service (MLS). The MLS is the key database used to populate the data on home listing websites and used by buyers to find houses. You can use a flat-fee service to get your house on the MLS. But whenever a home is listed on the MLS, you have to offer at least some commission to a buyer’s agent.

The second reason you’ll have to pay the buyer’s agent is because that’s what is customary. A buyer is not going to want to pay their agent out of their pocket. And they will likely not make an offer on your home if they would be expected to pay their own agent instead of you doing it as a seller.

How much commission should you offer to a buyer’s agent?

When you list your home on the MLS, you have a choice of how much commission to offer to the buyer’s agent. Typically, however, it’s a good idea to offer a minimum of 2.5% and perhaps even the customary 3%. If you offer too little commission, agents may try to deter buyers from purchasing your property.

This is undoubtedly a lot of money to pay, but you don’t want to lose out on a sale just because you’re unwilling to pay the customary fees to an agent representing potential buyers who could be interested in your place.

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