Dos and Don’ts of Negotiating With Real Estate Agents
Everyone likes to save a buck. When it comes to listing your home for sale, you may be wondering if there’s any room to negotiate your real estate agent’s commission. Here’s what you need to know.
The Seller Pays Commission
In a residential home sale, it’s the seller who pays the real estate agent’s commission, although technically, it comes out of the sale price before any concessions are taken into account. The listing agent then typically pays a portion of their commission to the buyer’s agent and subsequently splits their share with the person who runs their real estate team or office.
Standard Commission Rates
There’s no set figure for a commission. However, depending on where you live, there may be a standard percentage, like 6% of the sales price. And these fees can add up, especially the more expensive your home is. Keep in mind, however, that the commission is intended to reimburse the agent for the expenses they incur in marketing your home.
Negotiability of Commissions
Like the saying goes, everything’s negotiable! And that’s true when it comes to commissions. But there are some factors that may affect your ability to negotiate. For example, busy agents may feel they don’t have to reduce their fees because they have enough business. Or they simply may not want to. While a recent survey showed that 73% of agents wouldn’t lower their rate, it doesn’t hurt to ask.
How to Negotiate
While most prospective agents will gladly provide the amount of their fee, it is up to you to find out exactly what services you get for that fee. If you’re concerned about the expense, ask if there’s any room to negotiate the commission. Just remember that you don’t want any discount to affect the buyer’s agent portion since that could deter them from showing your property.
Some factors that may affect an agent’s willingness to negotiate:
- Consider Reduced Services: Eliminating some pricier elements of representation like professional photography may make a lower commission more attractive.
- Hire a New Agent: Newer agents may be willing to take less in fees in exchange for the experience.
- Have a Pre-Inspection Performed: This can allow you to make repairs before listing to eliminate surprises.
- Buy and Sell: If you use the same agent to list your home and buy a new property, they may be more willing to offer a discount.
- List in a Slow Season: Depending on where you live, there may be slower times for agents when they may want the business more than they want the full commission.
Finding a listing agent is the first step in selling your home. Ready to get started? Get connected with an experienced, local real estate agent. We’ll help you get settled in.