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How Much Does it Cost to Hire a Realtor?

Updated: Nov 6, 2019

Here is a common question: How much does it cost to hire a Realtor? Can I buy or sell a house without one and save some money?

How Much Does it Cost to Hire a Realtor?

In Texas, the cost of a Realtor is paid out of the proceeds that the Seller receives from the sale of the property.

What If You’re the Buyer?

As a home buyer, it is in your best interest to hire a Realtor to represent you in your real estate transactions. Whether the Buyer decides to hire someone to help them navigate through the transaction or not, the same amount will be paid out by the Seller either way. As a Buyer, I would much prefer having an expert on my side to fight for me and make sure that I'm getting the best deal possible if it is going to cost the same as not hiring anyone.

What If You’re the Seller?

As a Seller paying the Realtor costs, this can be more daunting than when you're in the Buyer's position. A common misconception is that when you sell your home yourself and don't pay a listing agent, you will net more money at the closing table. According to data gathered by the National Association of Realtors consisting of transactions completed across the country, Realtors on average sell their client's house for 10% more than if the owner had sold it themselves. Calculating in even a 6% or 7% commission on a $500,000 house, the Seller is still making $20,000 more than if they had sold the home themselves.

That is considering it can be sold. Approximately 7% of homes sold are listed by owner, with the other 93% being listed by a real estate professional. Many home buyers recognize that the process is much more frustrating when working with someone who is not a professional and not familiar with the entire process. Having someone on both sides who does hundreds of transactions per year helps the whole process go smoothly and with as few hiccups as possible.

A great analogy I heard recently from a client of mine was comparing the service provided by a trained real estate professional to that of a food server in any restaurant you might eat at on a given day. When you look at the service provided during an hour-long meal compared to the personalized experience provided over months by a Realtor to a client acting as a fiduciary and handling all duties and fighting on behalf of their client, how do you think they should be compensated? Typically, it is not appropriate to eat at a restaurant that has a waitstaff unless you plan on tipping 20% to compensate them for their service during your meal. Why should using a professional to handle one of the largest financial transactions of your life not be compensated for their time and service?

Hopefully, this has provided a little more clarity in terms of the actual cost of hiring a Realtor for their services, and how much benefit it provides to have someone acting as a fiduciary on your behalf.


Matt Moreland, Realtor® is a real estate agent serving the Lubbock, Texas and the South Plains. After graduating with a Bachelor of Business Administration in Finance with a concentration in real estate from Texas Tech University, he began practicing real estate full time at McDougal Realtors in Lubbock, Texas. Matt enjoys spending time with his wife and their dog. Some of his hobbies include investing in real estate, elk hunting, backpacking, barbecuing, and playing guitar. To schedule a commitment-free consultation please call 469-744-3610 or fill out this form to get started.

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