3 Reasons Real Estate Commissions Are Controversial

By Home Bay

Posted on November 29th, 2017

When you sell a home, you’re responsible for paying both the buyer agent commission and the seller or listing agent commission. If both you and your buyer use a traditional agent, that means you’ll be paying 6% of your final sale price to an agent! Not surprisingly, both buyers and sellers are becoming resistant to the traditional real estate model. Read on to learn why, and to learn about what’s changing in the industry.


  • Sellers Lose Thousands at Closing
    While home buyers typically are under no obligation to pay any commission to a real estate agent, the commission percentages for sellers can vary greatly. Typically, they hover somewhere between 2-3%, and once you add the buyer agent commission in, you’re talking about losing 6% of the home equity you built to real estate commissions. In California, the average seller spends over $14k on commissions. Looking at those numbers, it’s easy to see why sellers are uneasy about paying so much money to an agent.

  • What About Discount Brokerages and FSBO Service Providers?
    If you don’t want to pay full commissions, there are discount options you can consider. But, these options come with their fair share of drawbacks. For example, discount brokerages or For Sale By Owner services sometimes offer discounted fees (1-1.5%) but they also typically offer limited services. You may find yourself faced with having to make choices on what services to forgo if you opt to use a provider that charges additional fees for additional marketing, extended listing time on the MLS, and so on.

  • You Can Get Agent Support at a Fraction of the Cost:
    Finally, as the Internet has become an increasingly popular resource for homeowners and buyers alike, more options have sprung up that have made the idea of real estate commissions even more controversial among savvy sellers. For example, Home Bay provides comprehensive home seller support for a low flat fee. On average, our sellers save over $10,000 in commission costs. And our sellers love it! They’re using their savings to do everything from boosting retirement savings to paying for their kids college, to buying more real estate!

The bottom line is, the market is changing, services are changing, and buyers and sellers have comprehensive money saving options available, for the first time ever. Take advantage and save thousands!

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Posted in Real Estate Commissions