Don't let unexpected fees bite you!

Avoiding Realtor Fees on a For Sale By Owner

by Kelli Clevenger

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Although DIY home selling is chosen to avoid realtor fees, unexpected fees can still reduce your profits. A little knowledge may increase profit margins in today's market.

DIY home sellers know about website and posting fees, as well as advertising fees (yard signs, classified ads, etc.). And most know it's free to post on social media sites like Facebook, Twitter, and Pinterest; just ask others to share your post. Most postings on Craigslist are free, and For Sale by Owner sites charge minimal fees.

Then there are real estate sites like, Zillow, and Trulia. receives input from multiple listing services that are administered by real estate professionals, but individuals can post on Zillow and Trulia. It's free or low cost (prices vary according to services). But, beware. Although they're great tools, you may encounter hidden fees. You may end up owing realtor fees. These sites are used by brokers and realtors. When they find a home their client is interested in, they'll contact the DIY seller.

As a DIY home seller, you're trying to avoid realtor fees, but their fees still apply when they show your house. Realtors don't work for free, and you can't blame them. But you need to understand the process.

When contacted, you need to ask questions. This will reduce your risk of profit-loss and help avoid awkward conversations later.

Ask these questions:

  1. Who is your employer?
  2. What are your fees?
  3. Who pays the realtor fee?
  4. Are there additional fees?
  5. Who pays closing costs, appraisal, and inspection?
  6. Who pays attorney fees?
  7. Is any of this negotiable?

If answers aren't satisfactory or the realtor is uncooperative, you can end the conversation. If you're still interested, there's a lot to consider.

According to Florida licensed realtor Kim James, almost everything is negotiable. However, some stipulations are mandated by individual states and cannot be negotiated. She advises to contact a local real estate attorney, because transactions and laws can vary from state to state, as well as between companies. She says a purchase agreement can be created and managed by the attorney.

According to Mrs. James, the seller is not always required to pay all fees. Fees can be negotiated and put into the purchase agreement.

She explains that realtors represent brokers. Realtors must get permission to alter fees. Even this can vary between states and companies. In some cases, you may deal directly with a broker.

If possible, negotiate fees before your property is shown. The realtor should explain fees upon contact. Be sure to ask questions. An attorney might not be necessary at this point. However, get any agreements through email and save/print all correspondence. You can then refer back to it when an attorney is hired.

Another similar situation can affect profits of the DIY home seller. You're contacted by a potential buyer, so you schedule a showing. They love it. Then they reveal they've already hired a realtor. And they signed a contract. Yikes.

Even if the realtor doesn't accompany the potential buyer to the showing, you may be required to pay a portion of their fees. What should you do? Always ask a potential buyer if they're being represented by a realtor. If so, contact their realtor and ask questions.

If possible, ask and negotiate before you show the house. Fees are usually a small percentage of the sale price. If you can't agree, you can cut ties and wait on another potential buyer. If you have an interested buyer, never sign anything without an attorney's advice.

What's the best-case scenario? It's an interested buyer with no realtor. In this case, hire a reputable attorney.

Don't avoid DIY home selling. Instead, ask questions, don't agree to anything unsatisfactory, and hire an attorney. You'll be protecting yourself and your profit margin.

Reviewed September 2017

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