How to Save Real Estate Commission

Are you tired of paying outrageous real estate commissions?

It’s a FSBO myth that you can’t sell real estate without a broker. Let me show you Six ways you can save thousands of dollars.

Six for sale by owner options:

1. Sell by owner – pay no co-op to buyer agents.
2. Sell by owner – hire a licensed broker or an attorney to write your contract.
3. Sell by owner – offer buyer agents a co-op fee.
4. List as a FSBO on MLS for a Flat Fee – pay buyer agents a co-op fee.
5. List full service MLS – pay a discounted commission.
6. Sell on eBay – pay their fees.
7. Pay an outrageous 6-7% commission.

You can mix and match to come up with several ways to save commission. Based on twenty plus years of working with For Sale by Owners, I’ll give you pros and cons and make Recommendations.

1. Sell by owner – pay no co-op to buyer agents:

You sell to a buyer who is not represented by a broker. You’re not represented by a broker so there is no commission.


o You save commission.
o You maintain complete control.
o You don’t list with a broker.


o There could be contract errors.
o You may not have access to State approved forms.
o You are open to legal recourse.
o The contract may not be defensible in a court of law.
o Inspections and deadlines may not be addressed.
o It’s difficult to build trust with the buyer.


Use plan two.

Hire an attorney or a licensed broker to write your contract. This builds trust between you and your buyer.

2. Sell by owner – hire a licensed broker or an attorney to write the contract:

This is a smart economical choice.


o The contract will be on the correct forms.
o Required inspections and deadlines will be addressed.
o Terms are usually defensible.
o Less chance of legal repercussions.
o Less chance of contract failure.
o You can split the cost with the buyer.
o Builds trust between you and the buyer.


o It costs more money but it’s worth it.
o You have to find a broker or an attorney who will write the contract for a reasonable fee.


Do It!

3. Sell by owner – offer buyer agents a co-op fee:

This is a good option; however, agents who have buyers may not know you have a house for sale. Pros:

o You open the market to more qualified buyers.
o A licensed agent will write the contract.
o You may sell quicker.
o It costs less than a law suit.
o You don’t have to list with a broker.
o You save money.
o You maintain control.


o It costs more money.
o The buyer is represented by an agent. You are not.


Use plan two. Hire an attorney or a licensed broker to review the contract. And, if needed, write a counter offer. Now you have someone looking out for your interest.

4. List on MLS for a flat fee – offer buyer agents a co-op:

This is the best of both worlds. You remain a for sale by owner. You remain in control. And you save half of the commission.


o Increased buyer exposure.
o 90% of the buyers buy with a broker.
o You pay half the commission you’d pay for full service and you get full MLS exposure.
o You maintain the right to sell by owner.
o Buyer agent contracts will be on the correct forms.
o If you pay for contract assistance, all forms will be correct.
o Agents call you to set showings and to present offers.
o You maintain control.
o You increase the chances of selling.
o You will get a higher price.


o It costs you more money
o The buyer is represented by an agent – You are not


Incorporate with plan two.

Hire an attorney or a licensed broker to review your buyer agent contact and, if needed, write a counter offer. Now you have someone looking out for you. It costs far less than a law suit. You save money and maintain control.

5. Do a full service MLS listing – pay a discounted commission:

This is the great choice. You get representation. Most brokers will negotiate commission. If they won’t… Find one who will.


o You have someone to review your offers, write counter offers and monitor the closing.
o You save money, though not as much as with a flat fee FSBO listing.
o Your contracts will be on correct forms.
o Inspections and contract dates will be monitored.
o You’re less likely to have legal repercussions.


o It costs you more money.
o You lose some control.

6. Sell on eBay:

I know nothing about selling real estate on eBay; however, I know it is popular. I’ll make some logical assumptions:

Pros: You save commission.


o There could be contract errors.
o You may not have access to state approved forms.
o You could be at risk for legal action.


At this time, I’m not comfortable recommending eBay.

There is one more option; you could:

7. Pay an outrageous 6-7% full service commission:


o The broker takes over the sale.
o You get a sign, MLS and various goodies.
o The broker presents offers to you.


o You pay too much to sell your home.
o You lose control.
o I could go on and on but I won’t.


Sell by owner and save thousands of dollars.
Copyright (c) 2007 Wee Dilts

At this time, I’m not comfortable recommending ebay.

There is one more option; you could:

7. Pay an outrageous 6-7% full service commission:


o The broker takes over the sale.
o You get a sign, MLS and various goodies.
o The broker presents offers to you.


o You pay too much to sell your home.
o You lose control.
o I could go on and on but I won’t.


Sell by owner and save thousands of dollars.
Copyright (c) 2007 Wee Dilts

Real Estate Agency Best Practice – Protect Your Commission Before You Give Out Details

If you haven’t figured it out yet, the commercial real estate market is like all others when it comes to the competition in your area and people taking your business away from you. Be mindful that contact details given to the wrong person and without some written protection of your commission will likely mean that you loose the deal or loose the client or both.

Trust no one when it comes to your commission. Get all verbal facts and agreements in writing before you release your prospect information; and it’s not just the other agents that you need to worry about.

Experience proves that even clients will take verbal information and use it to their advantage if they can to close the deal directly and avoid commission. This means that you must have a paper trail that supports your claim on commission and the introduction of the prospect. You appointment to act for the client or that of the other agent should be valid and in writing. There is only one way to do things and that is the right way.

If you are approaching another agent to do a conjunction deal on one of their listings, do not presume that they have a valid appointment to act. Ask for some proof or commitment from them before you offer to work with them in conjunction.

Can you trust a verbal agreement from the client or another agent that your introduction of a prospect will be honoured when it comes to commission? No, is the simple answer.

Always back up any verbal agreement by supporting it in writing before you release details of the deal or the prospect to others. Money speaks many languages and influences many decisions. If commission can be saved because the deal with you as the real estate agent is not in writing or evidenced in some way, then expect that such will be the case.

An agreement is not a solid agreement until you have firmly tied it down with written instructions. Many people conveniently forget what was said when it comes to contracts or leases involving lots of money. In commercial real estate that is just about every deal. Expect disagreements and problems, so protect yourself and your commission at all times.

Take your own notes from any verbal instructions or agreements but then take it to the next level and put it in writing. It is quite common to have legal battles when it comes to commercial property, clients, and real estate agents. Critical statements and information must be checked and evidenced back to the source.

In any conjunction with another agent there is a temptation to act on a verbal agreement that the other agent will work with you if you introduce a qualified prospect to their listing. If you know the other agent, the temptation is to do the deal and do the paperwork later. So many commissions have been lost simply with this one situation.

Many clients have said that they will pay you commission if you bring them a purchaser for the property at the right price. Heard that before haven’t you?

So the way you can protect your commissions with other agents is to create a well-crafted letter of conjunction or agreement that can be sent to the other agent at a moment’s notice. It should contain key descriptive details on:

  • Name of the agents involved
  • Details of the owner or of the property
  • Details of the commission
  • Details of how the commission will be paid and by when
  • Date of agreement
  • Signatures of all key parties

Acting on unchecked or incorrect property information will also open the door to debate and legal claim. If you are in the property game long enough, you will be involved with such disputes, and the only way you can protect yourself is by diligence to detail and the evidence of everything. Stay legal and stay safe. You will create better deals.

Is Your Business Opportunity Program Legal?

Introduction To Business Opportunity Programs

Business Opportunity Programs have always been very popular with many people. They offer the ordinary person the chance to make money from home without the usual costs of setting up in business

There is usually very little if any stock to buy, no overheads much to speak of, no investment in publicity materials etc – all these services are provided free by the program owners. Typically an online opportunity program will provide participants with banners, text ads, email ads, ezine ads etc – even a full website, all completely free

The only cost involved is a small monthly membership fee – although even this can be avoided until you get used to the program, as many programs will allow you to join for free

Do These Programs Really Work?

The honest answer in brief is – some do: many don’t!!

The first question to consider is whether the program is in fact legal

Many people down through the years, that business opportunity programs have been around, have lost money – sometimes all their life savings. For this reason most governments in western countries have passed laws to outlaw most of the worst kind of these schemes, often referred to as “Ponzi” schemes

However the law is often openly ignored by many of the people running these business opportunity programs. Perhaps they did not take appropriate legal advise before starting the program, perhaps they were unaware that what they were doing was illegal – or maybe they just didn’t care. For some people as long as they are making money, they don’t care that other people are losing money!!

However the critical point to grasp is that “ignorance of the law is not an excuse”, and any one that promotes a trading scheme, as an affiliate, is just as guilty as the people that run the scheme. In general you should always do your homework on the business in question as most of these type of businesses will not survive very long

A Pyramid Matrix

A pyramid matrix simply means an arrangement where the number of people in each level of the pyramid gets bigger the further you go down. Generally the number of members will increase by a set multiplier e.g. you start with 5 people, each of these people refers 5 people, so on the second level or tier there are 25 people, being 5 X 5. As you go down each level of the matrix you multiply the members by 5 each time. So the next level will be 25 X 5 members which is 125

The problem with this arrangement – and the typical one with business opportunities – is that this rate of growth is unsustainable. You would very quickly need one million people and more to sustain this matrix. In fact by the time you got down to the 9th level of this matrix you would need nearly two million people in the scheme – and each of these two million people would each have to find 5 members, which would then push the membership to 10 million!!

The General Legal Rule

For these reasons laws have been introduced to protect the public from such un-viable schemes

The general rule is that it is illegal to encourage someone to pay money in joining or participating in a trading scheme, if the only or main purpose of the scheme is to encourage other people to pay money by way of joining or participating in a trading scheme e.g. you join a scheme and pay a membership fee of $9.99 – you earn this money back when you find 5 other people to pay their membership fee of $9.99

Anything that breaks this rule is almost certainly illegal – you would be well advised – however enticing the scheme sounds – to stay well clear of such arrangements

Many business opportunity programs break this rule because people join as free members and then must “upgrade” their membership in order to participate in the compensation plan. However they receive nothing of substantial or equivalent value to the membership fee being paid. In other words if you pay $9.99 per month and receive free “training”, a “free” website, free “support” via a forum etc – none of these things can be regarded as being of “substantial or equivalent” value

The law regards these schemes as an illegal unregistered lottery, and anyone who promotes such schemes is engaged in an illegal activity – certainly not a legitimate business!

Product Based Opportunities That Have A Network Aspect

The way to make such money type schemes legal, is to always ensure that people are receiving something of value for their membership fee e.g. some real product or service which could be bought by the general public

Product based opportunities are fully legal because people join for free as “distributors” and can sell a range of products and earn a commission, based on the sales they generate. There may be an additional “add-on” network aspect, which may require the payment of a monthly fee. This payment is fine, so long as there is something of value provided for the payment, and so long as making the payment is not compulsory

Because product based opportunities are nearly always legal – providing there is a “join for free” option, then you can always have confidence that such businesses, based on selling a product or range of products, is a viable opportunity and will almost certainly last into the future

What Qualifies As A Product?

You need to be clear what is meant by a product

In general we are talking about a real physical product such as slimming pills, ski jacket, health drink, bedside clock, perfume etc. If the main purpose of the business is to sell the product – even if there is some additional network aspect, then you are generally on firm ground

The Network

We have mentioned the phrase “the network aspect” we need to be clear what is meant by this. We do not mean a standard pyramid matrix. The idea of network marketing is to allow for a system of network distribution – so that each member in the organization sells a small amount of product per month, but altogether this amounts to a much larger total value. However there is no requirement for people to participate in building a network if they do not wish to – they can just sell the products for their standard commission. Such a system will produce far greater group sales than the same number of people just paying a monthly membership fee.

Imagine if I have 100 people in my network all selling just $50 of product a month. That amounts to total sales for the group of $5,000 per month. But if those 100 people just paid a membership fee of $9.99 per month, the total revenue would be only $999. In addition, as each of those 100 people would be receiving a commission cheque for their $50 worth of sales, they would be much more likely to continue with the business, as compared to simply “losing” a membership fee of $9.99 with no commissions for their trouble


Be very careful about business opportunity programs. Product based opportunities work very well via a system of network distribution. However if there is no product of any significance, and you only make money by getting other people to pay a membership fee, then this scheme is very unlikely to pay you any money ever. With a product based opportunity you can sell real products and collect a trade commission even as a free member. As a result the business is viable and a network can be built up into a significant monthly income