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Reader Question: How much would a buyer's agent charge to make an offer on a property not listed with a broker? Given the recent changes in real estate rules, I'd like to understand the current fees.

Monty's Answer: The shifting landscape of real estate has created interesting new dynamics for buyers such as Tom Peterson, who recently navigated this exact situation. When Tom found his ideal property -- a midcentury modern home being sold directly by the owner -- he discovered that traditional commission structures had evolved significantly. In the past, buyer's agents typically received their commission through a split with the listing agent. However, today's market demands transparency and direct fee negotiations, especially when dealing with for sale by owner (FSBO) properties. Tom's experience revealed several common fee arrangements that buyers can expect.

SOME AGENTS CHARGE DIFFERENTLY

A few agents now offer flat-fee services for handling FSBO transactions, typically ranging from $2,000 to $5,000. This straightforward approach appealed to Tom, who appreciated knowing precisely what he would pay. Other agents still prefer percentage-based compensation, usually between 1.5% and 3% of the purchase price -- notably lower than traditional commission splits since no listing agent is involved. Tom's research led him to a veteran agent with two decades of experience. She explained that her hybrid model included a $2,000 base fee plus 1% of the sale price. This structure, she explained, reflected both the fixed costs of handling any transaction and the variable effort required based on the property's price point.

Essential Transaction Services:

No. 1: Property evaluation and comparative market analysis

No. 2: Offer preparation and submission

No. 3: Negotiation with sellers

No. 4: Transaction coordination and closing oversight

No. 5: Document review and due diligence management

Key Fee Considerations:

-- Payment timing (usually at closing)

-- Service scope and customization options

-- Market area adjustments

-- Transaction complexity factors

-- Agent experience level

She helped Tom understand that while comprehensive services on unlisted properties typically cost $3,000 to $7,500, this investment often proves worthwhile. Her expertise in negotiating helped Tom secure the property below the asking price, effectively offsetting her fee.

The current market may be pushing agents to be more creative and flexible with their fee structures. Some agents offer menu-based pricing, allowing buyers to select and pay for only the needed services. Others provide full-service packages with transparent pricing that reflects the actual work involved rather than traditional commission percentages.

Tom's successful purchase highlighted how the evolution of agent compensation is leading to more client-focused services. Rather than working within rigid commission structures, some agents now customize their fees based on specific situations and client needs.

For buyers considering an FSBO purchase, discussing fee structures up front and getting all agreements in writing is crucial. Understanding exactly what services are included, how fees will be paid and what additional costs might arise helps avoid surprises later in the transaction. The downside to these changes is homebuyers cannot finance their commission as in the past and must budget for it as an additional purchase cost, as sellers are no longer obligated to pay the buyer's broker. While professional representation still requires a significant investment, buyers now have more options, one of which is to buy directly from the seller. According to the National Association of Realtors, in 2023, over 280,000 buyers did exactly that.

Richard Montgomery is a syndicated columnist, published author, retired real estate executive, serial entrepreneur and the founder of DearMonty.com and PropBox, Inc. He provides consumers with options to real estate issues. Follow him on Twitter (X) @dearmonty or DearMonty.com.

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