How to Sell a Home Without Paying Traditional Commission

Traditional real estate commissions typically range from 5% to 6% of a home's sale price, split between the listing and buyer's agents. For sellers seeking to reduce costs, alternatives exist that maintain professional oversight while using different compensation structures.

In short: Sellers can reduce commission costs through flat-fee brokerages (fixed fee with licensed representation), discount brokerages (reduced percentage), or FSBO (no listing broker, no representation).

Understanding Traditional Commission Costs

In traditional real estate transactions, the seller typically pays a percentage-based commission that is divided between the listing brokerage and the buyer's brokerage. This commission is deducted from the seller's proceeds at closing.

Alternative Compensation Models

Flat-Fee Brokerages

Flat-fee brokerages are licensed real estate firms that charge a fixed dollar amount rather than a percentage of the sale price. These brokerages provide professional representation, MLS listing access, and transaction coordination for a predetermined fee.

The flat-fee model maintains broker oversight and regulatory compliance while offering a different pricing structure. Services typically include listing submission, disclosure assistance, offer review, and closing coordination.

For Sale By Owner (FSBO)

In a For Sale By Owner transaction, the seller handles all aspects of the sale without broker representation. This eliminates commission costs to the listing broker but places full responsibility for legal compliance, documentation, marketing, and negotiation on the seller.

FSBO sellers do not have access to the MLS through a brokerage and may face challenges reaching buyers who work with agents. FSBO transactions may still involve paying compensation to a buyer's agent if the seller chooses to offer it.

Discount Brokerages

Some licensed brokerages offer reduced percentage-based commissions, such as 1.5% to 2%, rather than the traditional 2.5% to 3%. These brokerages provide licensed representation but may offer a more limited scope of services compared to full-service firms.

What Licensed Representation Provides

Working with a licensed brokerage—whether flat-fee, discount, or traditional—provides:

• Access to the Multiple Listing Service (MLS)
• Regulatory compliance oversight
• Errors and omissions insurance coverage
• Professional guidance on disclosure requirements
• Representation in negotiations
• Transaction coordination with escrow and title
• Document management and record-keeping

These services reduce legal risk and administrative burden compared to unrepresented transactions.

Buyer Agent Compensation

Regardless of the listing broker's compensation structure, sellers must decide whether to offer compensation to the buyer's agent. This decision affects how the property appears to buyer agents and their clients.

Offering buyer agent compensation can increase property exposure to represented buyers. Not offering compensation may limit the pool of interested buyers to those working without representation or willing to pay their agent separately.

Cost Comparison Example

Regulatory Considerations

All licensed real estate brokerages, regardless of compensation model, must:

• Hold an active broker license issued by the state regulatory agency
• Maintain errors and omissions insurance
• Comply with state and federal fair housing laws
• Provide required disclosure documents
• Follow agency representation rules
• Manage client funds in accordance with trust account regulations

These requirements apply equally to traditional, flat-fee, and discount brokerages.

When Flat-Fee Models May Be Appropriate

Flat-fee brokerages may be suitable for sellers who:

• Own higher-value properties where percentage fees are substantial
• Are comfortable with technology-enabled processes
• Want licensed representation without percentage-based pricing
• Prefer predictable, fixed costs

When Traditional Models May Be Appropriate

Traditional percentage-based commissions may be suitable for sellers who:

• Own properties requiring extensive marketing or specialized expertise
• Prefer high-touch, concierge-level service
• Value established agent relationships and networks
• Are selling lower-value properties where flat fees may not offer savings

Example: SnapDwell's Approach

SnapDwell (California DRE #02040202) operates as a flat-fee brokerage, charging a fixed amount for listing services regardless of home value. Licensed agents provide guidance throughout the transaction, while technology handles documentation and communication workflows. Sellers receive MLS listing, disclosure assistance, offer consultation, and closing coordination for a predetermined flat fee.

Questions to Ask Any Brokerage

When evaluating brokerages with alternative compensation models, sellers should ask:

• What specific services are included?
• When is payment due?
• How is buyer agent compensation handled?
• What is the brokerage's license number and regulatory history?
• What is the cancellation policy?
• How are offers presented and negotiated?
• What disclosure support is provided?

Conclusion

Sellers have multiple options for reducing or restructuring real estate commissions. Flat-fee brokerages provide licensed representation at fixed cost, discount brokerages offer reduced percentages, and FSBO eliminates listing broker costs entirely but requires the seller to handle all transaction aspects independently. Each approach involves different trade-offs in cost, service level, and responsibility.