Now that the real estate market is overheated, some homes are selling in a matter of days – and even with cash bids well above the asking price. What does it mean? if you are looking to sell and think your home will sell quickly, perhaps you can negotiating a lower commission with your real estate agent… Some agents can refuse to reduce their commissionbut it doesn’t hurt to ask, especially when this seller’s market works in your favor. Here’s what you need to know.
How do commissions work?
In a typical home sale, the seller pays commission to both the buyer and the seller’s agent using the proceeds from the sale. The average total discount was 6% of the selling price.although in recent yearss fell to slightly less than 5%, according to Real Trends, a real estate research and consulting company.
For a $ 500,000 home, that 5% would be $ 25,000. half of which goes to your agent’s brokerage company (the other half goes to the buyer’s agent)… This half is split between the brokerage company and your agent, usually in the 40-60% range. The agent then has to cover the cost of decorating and marketing your home, which may include expenses such as brochures and social media videos. This means that after taxes, your agent earns approximately $ 4.500 for the sale of real estate.
There are discounted rate brokerages that also charge you a flat 1% commission, but they pretty much just list your house and put up a sign on your lawn. It may be whatever you need in this market so that you can I want to take this into account as well. (The Balance has a good overview how are these discount brokers Work.)
How to negotiate a lower commission
You will want to do your best and negotiate a commission when you first hire an agent. Ask a potential agent about their experience and what you can expect from service at this rate.
Once you have an idea of what you are getting from a prospect, you can try to lower their commission by asking for a point or half a point from their commission.… Strong arguments for lower fees might include:
- The agent is inexperienced. If a potential agent only has a couple of years of experience selling homes, they will likely need your business more than an experienced agent with a lot of referrals. You should, of course, remember the old adage, “You get what you pay for,” but not all inexperienced agents are automatically bad.
- This is the seller’s market. It usually takes weeks or even months to sell homes, but these days we see homes selling in a matter of days, invisible from sight. By referring to listings and homes sold in your area, you can argue that your home will sell faster, which means your agent will have to do less work in a shorter period of time.
- The house will be empty. One of the biggest challenges for agents is negotiating with the owner to display and display the house. If you don’t actually live at home, this can make the sales process much easier for the agent.
- You can offer another listing opportunity. If you can offer other properties that can be sold, then a package discount would be a reasonable offer. Another way to do this is by successfully referring family or friends.
- You are a regular customer. If you have a good relationship with an agent and have sold with them before, it is wise to offer a discount, especially if you promise to use them later.
If you can use any of the above arguments in your negotiation, you are in luck with a reduction in your commission. Personally, I have had success with the “this will sell fast” argument and have been able to reduce our commission by 0.5%. But before, I sold the apartment to the same agent and could recommend others business is its way, so I’m sure it helped too.