How to Negotiate Your Realtor's Commission When Selling a Home
Many home sellers do not realize that most parts of the country have no laws governing
the realtor commission rates that must be charged by realtors. Even though many people selling
their home accept the commission charged by the real estate agency, others are able to
successfully renegotiate this important expense of selling a home.
It is important to remember that while many real estate agencies will negotiate, not
all do. It may be a good idea to check with several real estate companies in your area
to try to negotiate a more favorable rate. It is also important to not sacrifice a real
estate agency with a superior selling reputation just to get a lower commission on the
sale. Doing so may end up costing you money in the long run. It is important to strike
a good balance between cost and value.
When planning to sell your home, it is important to do plenty of research beforehand.
After all, you are most likely selling the most valuable asset you own. It makes sense
to do the research it takes to maximize the value you receive, and to minimize the
associated expenses.
One important area of research is what your home is worth. Having a good idea of the
value of your home will put you in a stronger bargaining position when it comes time
to negotiate the commission with your realtor. One easy and fun way to evaluate the
proper selling price of your own home is to find out what other homes in your
neighborhood are selling for. Try attending a few open houses, taking a look around
and seeing what those similar homes sell for. Since homes in the same neighborhood
tend to sell for similar prices, this is a good way to get a rough estimate of what
your home is worth.
You can also do research on the Internet and at the county courthouse to determine
what similar homes in your area have sold for. This is also a great gauge of the
strength of the market. If the selling price of the average home in your neighborhood
is a great deal lower than the asking price you may be in a buyer's market, and therefore
in a weaker position to negotiate the terms of your real estate contract. If, on the
other hand, houses are selling for close to, or even above the asking price, you will
be in a stronger position to reduce your real estate commission.
Determine the percentage you are willing to pay before you start negotiating with
the realtors. Having a firm number in mind will give you the confidence to succeed
in the negotiations.
It is a good idea to determine the qualifications of your realtor before the negotiations
begin. If you have a superior agent, the additional money you get for your home may
make the increased commission worth the price. If, on the other hand, you notice any
weaknesses on the part of the agent, be sure to use them as a bargaining chip to negotiate
a lower commission.
When negotiating the commission percentage, be sure to explore all your options, not
just the usual percentage plan. For instance, many home sellers these days prefer to
negotiate a flat fee for the sale of the home. In addition, dual fee arrangements are
popular. A dual fee arrangement is an agreement in which the home seller pays one
percentage if the house is sold through a buyer broker and another, smaller percentage,
if the house is sold only through the listing broker. In addition, many home sellers
work out various fees for consulting services, legal services and the like.
It is important to shop around at several different agents. Be sure to interview as
many agents as it takes to find one in whom you have confidence. Too many home sellers
simply hire the first agent they speak with, and they often end up unsatisfied as a
result.
If you are still unable to find a realtor who will represent your home for the commission
percentage you are willing to pay, consider listing the home with a real estate company
which charges one flat fee instead of a sales commission. These flat fee agencies are
becoming increasingly popular.
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