Can you negotiate real estate agent fees?


If you are preparing to sell your home, you may not want to go it alone. Listing and marketing a home can be time consuming, and negotiations with buyers are complex.

This is why so many home sellers hire the services of a real estate agent. If you hire an agent, your home can sell faster and you could end up with a much higher sale price.

But there is a downside to hiring a real estate agent: paying a commission. Real estate agent fees vary, but are typically between 4% and 6%. If you expect your home to sell for $ 500,000, you could pay your agent between $ 20,000 and $ 30,000.

To be clear, your real estate agent doesn’t necessarily keep all that money. If your agent works for a company, part of this commission is usually paid to the company, and a part can be shared with a buyer’s agent (the agent who drives a buyer to you and negotiates the sale to you. buyer’s name). And most agents, even those with businesses, are considered self-employed, so they also owe a large portion to the IRS and therefore cannot afford to give up too much income. But in some cases, real estate agents walk away from a house sale with a nice sum of money.

If you want to work with a real estate agent, you might be wondering if it’s possible to negotiate the fees. Here’s what you need to know.

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There is room for negotiation

Real estate costs are not always fixed. Some agents are required to charge certain fees because the real estate companies they work for mandate it, but others may lower the fees to get more business.

Having said that, while you can try to negotiate real estate agent fees, your success is not guaranteed. If you are using an agent in high demand, that agent is unlikely to budge when it comes to commission. Why should they, if they don’t need the work, or could replace you with another salesperson who will pay their full fees?

If you are going to negotiate the fees of a real estate agent, it is useful to do the following:

  • Be reasonable. If your agent requests a 6% commission, you may be able to reduce that commission to 5% or 5.5%. But will your agent cut the fees to 4%? Probably not, especially if there are enough homes for sale in your area to keep your agent busy.
  • Offer another incentive. Typically, sellers pay realtor fees, not buyers. But, as mentioned earlier, real estate agents usually share their commissions with buyers’ agents. So if you tell your real estate agent that you will work with them to sell your house and buying a new one, it may cause your agent to lower the fees.

It may seem like real estate agents have an easy job, especially today as low mortgage rates fuel buyer demand and homes are leaving the market in record time. But real estate agents do a lot of work and bring a lot of knowledge. It is understandable that they want to be compensated fairly.

There is nothing wrong with trying to negotiate the fees you pay an agent, but don’t be surprised if your efforts are unsuccessful. That said, if you’re not happy with the fees an agent quotes you, shop around. It’s good to do this anyway, to make sure the charges presented to you are reasonable for your part of the country.

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