FTC FACTS for Consumers

FOR THE CONSUMER 1-877-FTC-HELP

ftc.gov FEDERAL TRADE COMMISSION

Selling Your Home? 

Tips for Selecting a Real Estate

Professional

I f you’re thinking about selling your home, you may be considering using the services of a real estate broker or agent. But before you sign a listing agreement, the Federal 

Trade Commission (FTC), the agency that works for a competitive marketplace, wants you to be 

informed about your choices.

REAL ESTATE BROKERS AND AGENTS

Before you hire a real estate professional, it’s important to know the difference between a real 

estate broker and a real estate agent. Real estate brokers are licensed professionals who assist 

sellers and prospective buyers of homes. Real estate agents are licensed professionals who work 

under the supervision of a licensed real estate broker. In return, the broker pays the agent a 

portion of the commission earned from the sale or purchase of the property. 
Facts for Consumers

Real estate brokers and agents earn commissions 

from the services they provide. The services and 

the commission due to a broker working with a 

home seller are set out in the listing agreement 

that the broker and seller sign. Brokers generally 

list your home on the Multiple Listing Service 

(MLS), a clearinghouse that member real estate 

brokers and agents use to exchange and update 

information on property listings, and to connect 

with other brokers or agents working with 

prospective buyers. To have a home listed on 

the MLS, a home seller usually agrees to offer a 

share of the total commission to a second broker 

who finds a buyer for the property.

Traditional, full-service real estate brokers

working with sellers provide a broad range 

of services, including helping prepare the 

property for sale, recommending an asking 

price, publicizing the home to prospective 

buyers, arranging meetings and negotiating 

with prospective buyers, following up on home 

inspections and other matters once a sales contract 

is signed, and arranging for the closing of the 

transaction. A broker also may help by referring 

the home seller to other service providers, 

like mortgage lenders, title companies, home 

inspectors, and real estate attorneys, which could 

make the difference between success and failure 

in closing a sale. That said, remember that you 

are not locked into the service providers they 

recommend. 

Non-traditional real estate brokers often offer 

many of the same services as full-service 

brokers, but on an a la carte basis, at a reduced 

commission rate, or for a flat fee. You may be 

able to pick and pay for only the services you 

want. If you choose more limited services, it 

means that you may have to do more of the work 

yourself to help sell your home. For example, 

some non-traditional brokers offer an MLS-only 

package, which includes listing the property 

on the local MLS for a flat fee: you would 

be responsible for every other aspect of the 

transaction, like advertising, running open houses, 

negotiating with buyers, and coordinating the 

closing.

HIRING A REAL ESTATE BROKER

Finding a broker whom you’re comfortable with 

may take a little time. Ask friends, co-workers, 

and neighbors who have sold houses in the recent 

past for recommendations. You also can see 

who’s selling property in your area by checking 

lawn signs and ads.

Interview several real estate brokers/agents 

to learn about their experience, track record, 

style, and market knowledge. Expect a broker 

to be professional: to return phone calls, to be 

organized, and to communicate clearly.

Here are some questions to ask to help you find 

the best real estate broker for you: 

• How many homes did you sell in the past 

year? Finding out what types of properties, 

how many units, and where brokers have 

sold can help determine how efficiently 

they’re operating and how much experience 

they have. 

• What is your commission? Real estate 

commissions are negotiable. They are neither 

fixed by law nor by any local real estate 

associations (at 6 percent or any other level). 

The rate could be a percentage of the final 

sale price of the property, an hourly fee, or 

a flat fee. The payment could be up front, or 

when the property is sold. As you interview 

real estate professionals, keep two things 

about fees in mind: a traditional full-service 

broker generally charges more than a nontraditional broker, and if you hire a nontraditional broker, you can expect to pay 

higher fees if you purchase more services. 
Facts for Consumers

• What share of the total commission should I 

offer to another broker who finds the buyer? 

Your broker should be able to recommend 

that.

• How will you market my home? Ask whether 

the broker plans to rely on the MLS alone, 

or use it in combination with newspaper ads, 

open houses, or other promotions. Will the 

home be visible on popular websites?

• Will you help the buyer get financing? You 

also may want to discuss any seller-financing 

options you could offer to attract buyers.

• Can you provide a list of references? The 

broker should be able to give you the names, 

addresses, and phone numbers of clients 

whose homes have recently sold. Ask each 

client how long their home was on the 

market, whether they were satisfied with the 

broker, and why. Ask if they have any tips 

for you – or lessons learned to share.

GETTING A WRITTEN CONTRACT

Once you’ve selected a broker, you will be asked 

to sign a listing agreement or contract. Make sure 

all the terms are in writing, including any oral 

promises. The agreement should include the terms 

of sale you will offer for your home (like the 

asking price), your brokerage arrangements (what 

the broker will do for you and how much you will 

pay the broker), and a start and end date of the 

contract. You may want to ask about or negotiate 

a termination clause if you become dissatisfied 

with the broker’s services before the end of the 

contract term.

There are two basic kinds of listing contracts:

• In an exclusive right-to-sell contract, you 

agree to pay the broker a commission no 

matter who finds the buyer – even you. This 

is the kind of agreement usually used for a 

seller to obtain the full range of traditional 

brokerage services.

• In an exclusive agency contract, you agree 

to pay your broker a fee or commission. 

The commission paid when the property is 

sold may be reduced or eliminated if, for 

example, you find the buyer, rather than the 

listing broker. This kind of listing agreement 

can be used to provide a limited range of real 

estate brokerage services. 

Selling real estate involves a lot of paperwork. 

To be legally enforceable, documents like 

listing contracts, sales agreements, offers, 

and counteroffers must be in writing. Just as 

important is knowing what the writing means. 

Ask your broker or lawyer, if you have hired 

one, to explain any forms or documents that you 

do not understand. Check ftc.gov/bc/realestate/

resources/glossary.htm for a glossary of current 

real estate terms.

FSBO– SELLING WITHOUT A BROKER

Some consumers may consider selling their 

homes without a broker. These sales typically are 

called “for sale by owner” or FSBO. Going the 

FSBO route means avoiding paying a broker’s 

commission, but requires the consumer to take on 

the time and expense of selling the home that a 

broker normally handles. Services are available to 

help FSBO sellers market their properties. 

FOR MORE INFORMATION

To learn more about buying and selling a home, 

and for a glossary of commonly used real estate 

terms, visit ftc.gov/credit. Click on Mortgages 

& Your Home.

The FTC works to ensure a competitive 

marketplace, and to provide information to help 

consumers spot, stop, and avoid deceptive, 

fraudulent, and anticompetitive business practices. 

To file a complaint or to get free information 

on consumer issues, visit ftc.gov or call tollfree, 1-877-FTC-HELP (1-877-382-4357); 
Facts for Consumers

1-877-FTC-HELP FOR THE CONSUMER

FEDERAL TRADE COMMISSION ftc.gov

October 2006

Federal Trade Commission

Bureau of Competition

TTY: 1-866-653-4261. The FTC enters Internet, 

telemarketing, identity theft, and other fraudrelated complaints into Consumer Sentinel, a 

secure, online database available to hundreds of 

civil and criminal law enforcement agencies in the 

U.S. and abroad.