How to Minimize or Avoid Brokerage When Buying a Home

The number one cost is the brokerage that pays the real estate agent or brokerage firm. Brokerage is the fee charged by the middleman or broker between the buyer and the seller. This fee alone can significantly increase the cost of buying your home and cause you to exceed your home buying budget, as most brokers charge a brokerage fee of 1% to 3% of the total sales price. And, when buying a house, even 1% can mean a lot of money.

Here are some ways you can minimize or completely avoid brokerage fees when buying a home:

  • Although it is often said that brokerage or real estate agent fees are paid only by the seller and not by the buyer, in practice real estate agents claim brokerage from both the seller and the buyer. But, if you search hard enough, you may be able to find a broker that accepts brokerage only from the seller and not from the buyer.

  • With the help of the Internet, it is not at all difficult for you to find houses to buy instead of going to a real estate agent or brokerage firm. There are many sites listing houses for sale where you can contact the seller directly without going through an agent. This means you get a home without a brokerage or without a brokerage and totally save all the money you had to pay as brokerage fees.

  • There are many online sites that offer no-brokerage or no-brokerage houses, where you can find houses. With such sites in place, a zero brokerage house is just a Google search away.

  • Leverage your network of friends, family, colleagues, and acquaintances to find a home to buy instead of going to a broker. You probably have someone in your network looking to sell a home or at least know someone who can put you in touch with someone who wants to. You’ll save a ton of money in brokerage fees if you accept their network’s help in finding you a home.

  • Last but not least, if you find you have no choice but to go to a broker to find a home to buy, use the old-fashioned technique of dealing with the broker. Negotiate for a good deal and be persistent until you find a broker who agrees to your terms. This way, even though you won’t get a zero or no brokerage house, you will at least get a better deal and have to pay less in brokerage fees.

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