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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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