Who Pays Realtor Fees in a For Sale By Owner?

Realtor fees are commonly included as part of the closing costs of a real estate transaction. After all, they do perform a lot of actions throughout the process. For instance, when it comes to a buyer’s agent, they find the right home in the right neighborhood and help negotiate the right price.

A real estate agent is with a buyer from the initial search to the closing - and they are going to require a commission. Who pays realtor fees in a For Sale By Owner transaction? Let’s talk about it.

Understanding FSBO

FSBO transactions are those in which the seller chooses to handle the sale of their property all on their own - without the help of a realtor or listing agent.

Selling as a FSBO means saving the realtor fee. With many rates averaging between 5- and 6%, this could allow the seller to save quite a bit of money on the sale’s proceeds. Just imagine saving $25,000 on a $500,000 sale by not hiring a realtor that charges a 5% commission. Even those who charge between 2-3% commission can still pack a punch when it comes to giving up money.

Of course, this savings means that FSBO transactions do come with a lot of work for the buyer. Everything from staging the property, setting the sale price, and marketing to negotiating and closing the deal all falls onto the seller.

What’s more, a FSBO seller may not have their own agent, but they may still have to pay realtor fees. How is that possible? A buyer’s agent.

What is a Realtor Fee?

A realtor fee is a common fee that must be paid by either the borrower or seller in a transaction. It is a commission due to the realtor for the work they put into the deal. Determining who pays this fee will vary from state to state - and sometimes even county to county. Most of the time the person who pays the fee is simply customary and can be negotiated.

So, who actually pays the realtor fees? In Virginia, Maryland, Washington, D.C., and many other places, the seller is most commonly the one to pay the realtor fees for both parties. And, it is not uncommon for sellers in a for-sale-by-owner transaction to pay for realtor fees - even though they do not have a realtor.

Although most FSBO sellers choose this route to avoid having to pay this commission, they will still often find themselves responsible for the fees of the buyer’s agent. When compared to a normal transaction in which a seller will pay two commissions, this is still savings - and most will agree to the fee.

Other Fees FSBO Sellers Face

As a FSBO seller, it is important to note that even though you don’t have a real estate/ listing agent, you will still have other closing fees that you will be responsible for. These may or may not include title insurance fees, title search fees, appraisal fees, inspection fees, origination fees, credit reporting fees, attorney fees, homeowner’s insurance premiums, and more.

Even though you are required to pay out these extra funds, choosing to sell a property as an FSBO can save you a lot of money in the transaction.

FSBO Services at FIZZBOW

At FIZZBOW, we offer real estate services to For Sale By Owner sellers. We can take you through the entire process, ensuring legal, smooth transactions. You will avoid paying your own real estate agent while feeling confident that the sale will close safely and securely.

To learn more, contact us today at (571) 407-5479.