Negotiate a win-win proposition for you and your real estate agent
Real estate agents work on commission—they get paid when you buy or sell a home. The typical commission rate, which is split between the buyer’s agent and the seller’s agent, is between 5% and 6% of the home sale price. This percentage can add up to a large chunk of change, especially when property values are high.
If you want to keep more of the profits from the sale of your home, read on for tips on how you can negotiate a commission rate that is mutually beneficial to you and your hard-working real estate agent.
Similar to how you request quotes from several home improvement contractors for a renovation project, you’ll also want to talk with several real estate agents before committing to one. When searching for the right real estate agent, request commission quotes from your top contenders.
A larger real estate agency that works with more clients might be able to offer a lower commission rate, but a small boutique firm that works with a particular type of property (like luxury homes) or otherwise limited clientele might stand firm on their agents’ rates.
Move-in ready properties tend to sell quicker than those that need repairs or upgrades. This doesn’t mean you have to have a complete home remodel with premium finishes, though. Personal choices in cosmetic home upgrades aside, a true move-in ready property is one that doesn’t need any extensive renovations to make it liveable.
The more you can fix or spruce up in your home—including DIY projects—the easier it will be for an agent to sell. Since a quicker sale means your agent can move on to the next client and property, they might be willing to take a commission cut on your turnkey property.
A repeat customer is music to the ears of any professional service provider, particularly real estate agents. If you have a family member or friend who is also looking to buy or sell a home, present yourselves as a package deal to a real estate agent, and you might receive a discounted commission rate in return.
The same goes for looking to buy or sell an investment property—an agent will likely jump at the opportunity to sell multiple properties for the same client. The real estate industry is as much about relationships as it is properties, so when an agent has the opportunity to formulate a longstanding relationship with clients, it can be a win-win for everyone.
If you are willing to work with someone who has more enthusiasm than experience, you could potentially lock them in for a lower commission rate. You should not lowball any professional because they are new to the business, but you can try to negotiate commission rates with an up-and-coming agent looking to make a name for themselves in your community. The sale of your home will be something for you both to celebrate.
Real estate sales commission rates get split between two agents, the buyer’s and the seller’s. But the whole commission—and a lower one at that—might be possible if only one agent works on both sides of the transaction. This process is known as dual agency.
Another way to sweeten the deal for an agent is to sell one home and buy another with them. That means that the agent is working on two different transactions, but being that it’s the same client, you may be able to negotiate a package deal.
