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Driving down real estate commissions

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Many home sellers are looking for ways to avoid the common real estate commission of 6 or 7 percent. That percentage translates into a fee of more than $10,000 on the sale of the median-priced U.S. home.

One reason commissions are high: The value of the median home in the U.S. has risen to $200,000. The lure of high commissions has increased membership in the National Association of Realtors five fold since 1975. There are about a million members today.

Homeowners who balk at the high commissions have come up with some ways to bring down the cost of selling. The first, of course, is to negotiate with the broker and the broker's company for a lower fee. Sometimes that works.

Some brokerages are cutting selling costs into various parts so sellers can pick and choose. They will charge individual amounts to price the home, pay the agent, hold an open house, or write the contract.

In areas where it's a seller's market and homes sell quickly, sellers may use flat-fee real estate brokerages that charge as little as $3,000 to sell a home, regardless of the price. Two of the largest flat-fee firms are Help-U-Sell and Assist-2-Sell. They have about 900 offices nationwide.

"For Sale by Owner" is another option. But this plan can be risky if the owners don't know how to screen prospective buyers, are uncertain about pricing, or are not up to the mountain of paperwork required.

Some sellers opt to do the selling themselves and have the closing handled by a real estate broker for a fee.

Long Island Money & Careers Articles > Driving down real estate commissions

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