Let’s tackle this question first since it seems to be on every sellers mind: “Can I negotiate realtor fees?” In one simple word, the answer is “yes.” But there are several points a seller should consider in order to get the best deal they can. This is not only to protect them, but also to make sure they are getting the quality service they deserve.
Most homeowners make the mistake of signing off on the commission at the signing of the listing contract. This is not wise because you do NOT want to get short-changed when it comes to the very important marketing program that is vital in attracting buyers to your home. These crucial steps, such as virtual tours, advertising, photography, and online promotions are costly and time-consuming. You want to make sure that the exposure to your home is top-notch and that your real estate agent is doing everything possible to get the right buyer to your home.
New agents, or ones that work part-time or don’t sell very many homes, will always cut commissions at the signing of the listing because quite frankly, they often will not put the time and money into a home, or they don’t have enough experience or contacts. So, when that happens, your home won’t get the needed traffic. And if that doesn’t happen, then it’s obvious: no sale.
So think of it this way: you negotiate a lesser 3 to 4 percent commission at the time of listing. You pat yourself on the back because you figure you have just saved yourself thousands of dollars. Your home goes on the market and…you wait. A few days go by, then a few weeks, and next thing you know it’s a few months and you are still sitting on an unsold house. And it gets worse. Not only are you sitting on a house that is getting little traffic because no promotional materials are online and very little advertising or online presence, but now your house has the stigma of being on the market too long and buyers will think something is wrong with the home. Now it’s time to drop the price of the home or start the search for a new real estate agent.
Agreeing to the standard 6 to 7 percent commission at the listing with a professional and reputable real estate agent ensures that you are getting the level of service your property requires. The time to talk about lowering the commission is when you receive an offer on your home.
What Real Estate Agents Think
There is not a real estate agent around that doesn’t expect a seller to negotiate their real estate commission. The simple question, “Is your listing commission negotiable?” is always anticipated. For some, this isn’t a consideration, but for others, particularly those who are representing the seller in their home sale AND in their efforts to find a new home, many will offer a discount. Remember, there is NO set rate on commission, so it’s whatever the two of you agree upon.
While commission fees are at the top of every seller’s list in what to discuss with a prospective real estate agent, there are a few other things you should be aware of as well when looking for a real estate agent:
1. Stay Clear From The “Mr. Nice Guy.” What do I mean by this? You want a real estate agent that will work for you and represent you not by their personality, but by their effectiveness. When you hire an agent, you want to know that they always have your best interest in mind and they will fight tooth and nail to get you the best offer on your home. You don’t want to hire the person that may cave. You want the buyer to have that type of agent.
2. Overly Pushy Agents: On the other hand, you also want to avoid the over the top agent. An agent that seems overbearing is sometimes in desperate need to sell a home. Never feel pressured to make a decision regarding your home until you are completely satisfied. If an agent gives you stress, back away. The goal is for the agent to handle the stress.
3. Out of Touch Agents: Again, these are the agents that are not fully committed to the profession. They may work part-time, slow to answer emails or have a difficult time in creating an effective marketing plan. They are on autopilot so stay clear. I cannot express to you enough how in the long run, this will cost you money that should be in your pocket.
4. Uneducated Agents: When selling a home, don’t you want someone who not only has a degree, but that also continues to learn about the real estate business? In this day and age, with the economy suffering and everyone is uncertain about what is happening, the best thing is to have a real estate agent that understands the market and is up to date on the current economic conditions.
5. Agents That Don’t Listen: Let’s put it this way: You have a specific budget in mind and the point you continue to make with your agent is that you must adhere to the amount you have set to spend on a property. Then you can imagine how frustrating it is to spend a day with an agent that is determined to show you a home out of your budget range. A buyer should not waste their time looking at homes that don’t fit their budget or tastes for that matter. Talk with your agent about this and find out their reasoning. Are they assuming you will budge on price, or are there not any homes in your budget with the floor plan you desire? If you don’t get an answer that is satisfactory, it’s time to move on to another agent.