How to minimize or avoid brokerage fees when buying a house

The number one cost is the brokerage fees that you pay to the real estate agent or brokerage firm. Brokerage fee is the fee charged by an intermediary or broker between the buyer and the seller. This fee alone can add significantly to the cost of buying your home and cause you to go over your home buying budget, as most agents charge an agent’s fee of 1% to 3% of the total sale price. And when buying a home, even 1% can mean a lot of money.

Here are some ways you can minimize or eliminate agent fees when buying a home:

  • Although it is often said that agency or real estate brokerage fees are paid only by the seller and not the buyer, in practice real estate agents collect brokerage fees from both the seller and the buyer. But if you search hard enough you might be able to find an agent who mediates only through the seller and not the buyer.

  • With the help of the internet, it is not at all difficult for you to find apartments to buy instead of going to a real estate agent or brokerage firm. There are many websites listing properties for sale where you can contact the seller directly without going through an agent. This means you get no brokerage fee or home agent fee and completely save all the money you had to pay as brokerage fees.

  • There are many online sites that offer no agent fee or no agent fee houses that you can find houses on. With sites like this, a zero brokerage house is just a Google search away.

  • Use your network of friends, family, co-workers and acquaintances to find a home to buy instead of going to an agent. You probably have someone in your network who wants to sell a house, or at least knows someone who can put you in touch with someone who wants to do so. You save a lot of money on brokerage fees by enlisting help from your network to find a home for you.

  • Last but not least, if you find that there is no other option but to go to an agent to find a home to buy, use the age-old technique of negotiating with the agent. Haggle for a good deal and persevere until you find an agent who accepts your terms. That way, while you don’t get a zero brokerage fee or no brokerage home, you at least get a better deal and have to pay less brokerage fees.