Archive for February, 2010

Discover how you can save on the real estate commission on the sale of your house.  Contrary to what most real estate agents would have you believe, their commissions are not set in stone.  Real estate agents don’t like to discount their high commissions unless they have to.

The economy has really depressed home sales, and agents are feeling the pinch.  It’s definitely a buyer’s market when it comes to choosing an agent or broker to sell your home.

How much commission does an agent make when they sell a house?

The agent who takes the contract to sell your home is called the listing agent, and the agent who brings the buyer is called the selling agent.  Sometimes they’re one and the same.  The split between the two agents is usually 50/50.  So, on a $150,000 home, the “preferred commission rate” is usually 7%, or $10,500.  The listing agent gets half, or $5,250 gross, and they have to pay their broker half of that.  So they end up with $2650.

If they are both the listing and selling agent they will make double, or $5,250.  That’s a lot of money for just a few hours’ work.

Finding a real estate agent that will negotiate their fee

Local, independent agents or brokers are often your best bet.  They usually work for themselves, and don’t have to get approval to slash their commission rate.  Brokers at large real estate companies don’t like their agents cutting into their inflated fees.

Make a list of all the local real estate agents/brokers in your area.  You can get this information from the internet or local yellow book.

Call them directly and ask a few questions.  Here are some examples:

“Do you sell real estate in my neighborhood?”

“How many homes did you sell last year?”

“How long does it take you to sell a home in my neighborhood?”

These questions will put you in charge.  Remember, real estate agents are salespeople, but now you’re making them earn their sale.

Ask them directly if they will lower their commission.  If they hesitate or say “no”, thank them for their time and call the next agent on the list.

If their answer is “yes”, tell them you’ll be calling them back to do an interview.   Be sure to get both their office and cell phone numbers.

When you set up interviews, give the agent your street address, and ask them to bring along a marketing plan for your property, along with the best commission rate they offer.

Most real estate agents will try to get you to sign a contract on the spot.  Don’t let them pressure you.  Be honest, and let them know you’re still interviewing agents.  If someone else has offered a lower commission let them know.

In the end, choose the person who you feel most comfortable with, and offers the best commission rate.  Good luck on selling your home!