Can you talk with a real estate agent about their fees? First, you need to know 8 things. Think back to the last time you had a hefty bill to pay. You would have paid less if there was a reasonable way to do so, right? Read more to find out Can You Negotiate Real Estate Agent Fees?
Some people think the same thing about real estate agent commissions. A Redfin survey found that 60% of people who sold a home saved money on agent fees.
You can negotiate realtor fees, and if you do it right, you can save a lot of money when you sell your home. Not every time, but it might be worth a shot.
Can You Negotiate Real Estate Agent Fees?
What you need to know is this:
Know what you’re dealing with before you try to negotiate.
In most home sales, the buyer’s and seller’s agents are real estate agents. Most of the time, their combined commission is between 4-6% of the price of the home. If a person sells their home for $350,000 and the commission rate is 6%, they will have to pay a total of $21,000 in realtor fees. A 50/50 split would mean that their realtor would get $10,000, and the buyer’s realtor would get $10,000.
Most of the time, the seller pays both commissions, but that doesn’t mean they can’t find ways to make the buyer pay. One common way to do this is to raise the price of the home on the market. Read more about the brrrr method.
Most of the talks will be between the seller and the agent who is selling the house. Most of the time, the buyer and their agent are not involved.
Think of negotiating accurate realtor fees as more of an art than a science. Every situation is different, and you’ll have to use your best judgment sometimes. But you can still do things to help yourself succeed.
If you haven’t already, look into the commission fees for real estate where you live. Ask family, friends, and other people you know in the area how much they got for their home when they sold it.
At first, it might be scary to think about being turned down. On the other hand, a good realtor won’t be annoyed by your offer, even if they don’t take it. They get a time of questions like yours, so you’re not alone.
Know what will help you talk to the agent about fees
You’ll need to arm yourself with facts like a lawyer in court. If you know what will help your case, it will be easier to negotiate a lower commission.
Here are some things that can help you:
You are selling and buying with the same agent.
When real estate agents expect two commissions instead of one, they are more willing to negotiate. This can also help them get more recommendations and repeat business.
People who use the same agent to sell more than one home have the same idea. The more you work with a realtor, the more you might be able to negotiate their fees. Read more about How to Find Properties Before They Hit the Market.
You have already worked with this agent.
The discount for coming back is for real. If you’ve bought or sold a home with the same agent before, they might be more willing to lower their rate. This is their way of saying thanks for your business in the past and encouraging you to do business with them again.
The estate market is real.
Is it a buyer’s market or a seller’s market? In a buyer’s market, there are more houses for sale than buyers who want to buy them. In a seller’s market, on the other hand, there are more buyers than homes for sale on a multiple listing service (MLS).
You might have a better chance of getting a lower listing agent fee during a seller’s market. This is why:
Your home will sell more quickly.
It won’t take as much work to sell your home. Most likely, it will “sell itself.”
When fewer homes are on the market, there are also fewer sellers to work with. Read more on roomdome.com
The selling agent could use any or all of these reasons to see their rates as more open to negotiation. Researching national trends is an excellent place to start, but it also helps to get ready by looking at real estate data from your local housing market.
Your home can have a high asking price.
Before you decide how to ask for a lower commission, you should know how much your home is worth. Higher-priced homes mean higher commissions, which could be seen as more flexible.
Even so, if your home is worth less, you can still try to negotiate the real estate fees. If an agent’s fee goes down, they may be less likely to accept a discount.
Your home is in good shape to sell.
Before you talk to a realtor, ensure your home is in great shape. This will give you more negotiating power.
One of two things can happen:
Your home could use some updates, but you plan to do them ahead of time. The listing agent enters a home that needs little to no work before it can be put on the market.
Your home is already in great shape to sell.
If you choose the second option, you should be careful. It’s easy to overstate the condition of your home, just like it’s easy to do with a used car. If you think you need it, getting a second opinion never hurts.
A newer agent is working with you.
Agents with less experience might be willing to take a lower commission rate to make more sales and build their reputation.
Remember that agents with more experience might be able to sell your home faster and for more money. This depends on the agent and the state of the market, so it’s best to ask a lot of questions ahead of time and find out how each agent plans to sell your home.
You’re using a two-faced agent.
“Dual agency” is when the same real estate agent works for both the buyer and the seller. There are many things to think about, and in some states, having two jobs is illegal. But one benefit could be lower commission rates.
If the agent gets two commissions from the same deal, they might be more willing to take a lower one. It’s up to you to decide if that’s enough to make up for the possible bad things about the dual agency.
Make sure your offer is competitive
To negotiate anything, you must find a way to balance your expectations. If a new car is listed for $26,000, you might be able to get it for $25,000, but not if it’s $35,000. Not much is different when negotiating a real estate agent’s commission.
Asking a realtor to cut their commission by 0.5% or 1% can be a good idea if you can back up your offer with perks that make it easier to sell your home. Half of one percent may not sound like much, but if you own a $400,000 home, that’s an extra $2,000.
If your real realtor agent already gives you a lower price, you might decide it’s best not to negotiate. It all depends on how you want to sell and your situation.
Most real estate agents don’t get a salary, so commissions are the only way they get paid for their time and knowledge when someone buys or sells a home. Agents may also give a big chunk of their commissions to the brokerages they work for. This usually covers marketing costs, license fees, and other expenses.
Use the information you’ve already gathered to make the best offer. The more likely an agent will take you up on your offer, the more realistic your expectations are.