How to Negotiate Real Estate Commissions

Negotiating real estate commissions is a fairly easy process, and many times all a home seller has to do is ask. There is no set commission for real estate agents or brokers; most are free to charge whatever commission they would like. By negotiating a lower commission you will come away from the deal a happier seller with more money in your pocket, not the real estate agent's pocket. Read on to learn how to negotiate real estate commissions.

Difficulty: Easy

Instructions

1. Decide what services you would like to have performed for you. For example, if you would like to have the agent handle all showings, paperwork, phone calls, inspectors, appraisers and list your property in a multi-listing database it would be much harder for you to negotiate a lesser commission, but if in fact you would be willing to do some of the legwork you could likely strike a deal with the agent.

2. Ask the agent what services are included in the commission. If you do not feel like you would be getting your money's worth ask the agent to reduce commission.

3. Use an agent that is new to the real estate profession. Many times a newer agent will be willing to negotiate a lower commission in order to just get a listing and build a business.

4. Make the commission appealing to a buyer's agent. If your agent lists the property in a multi-listing database be advised that she will be disclosing the amount of commission she will be sharing with the prospective buyer's agent. If your agent lists your home for 3 percent, and a buyers agent sees that they will only be receiving half of that, or a 1.5 percent commission they are likely to steer their client to a home where they will receive a larger commission. Negotiating an extremely low commission could backfire if other agents don't want to bring clients to see your home.

Tips & Warnings

• Remember, asking for a lowered commission is free. Especially in a declining market most agents are willing to do whatever it takes to please clients so they will be able to make any commission at all.
• Beware of the "discount broker" or "discount agent." Many real estate brokers and agents charging very small commissions, generally between 1and 3 percent, are only going to be doing a small portion of the work involved in selling a house.