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Consumers Can Save Thousands of Dollars in Commissions
Consumers who live in states permitting them the option to choose innovative brokerage options, such as rebates or fee-for-service MLS-only packages, can potentially save thousands of dollars on commission payments.
This table shows that consumers can save as much as $7,500 in commissions on the sale of a median-priced home.
Table: Brokerage Options and Potential Savings on Home Sold for $222,273
Option |
Seller’s Broker Commission
|
Buyer’s Broker Commission
|
Total Commission |
Saving |
Full-Service
(5.2% commission) |
$5,779 |
$5,779 |
$11,558 |
$0 |
Option 1: Buyer’s Broker Rebate (1%) |
$5,779 |
$3,557 |
$9,419 |
$2,222 |
Option 2: Fee-for-Service, MLS Only |
$500 |
$5,779 |
$6,336 |
$5,279 |
Options 1 and 2 Combined |
$500 |
$3,557 |
$4,083 |
$7,501 |
For more information
Back to Competition and Real Estate main page
Notes
- All sales models assume a 50/50 commission split between seller's and buyer's broker.
- Full-service commission rate of 5.2% is based on REAL
Trends 500©.
- For examples of 1% buyer’s broker rebate offers, see “A Fresh Attack on the 6% Commission,” Money, 04/11/2006.
- For examples of $500 MLS only fee-for-service offers, see “Discount Real-Estate Brokers Spark a War Over Commissions,” Wall Street Journal Online, 10/13/2005.
- Savings are relative to the total commission paid for the full-service option.
- Consumers who choose options other than full-service may not receive as many services as consumers who choose the full-service option.
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