When you decide to sell your property or home, you will most likely have to hire a seller’s agent. This is a real estate agent that will handle the sale of your property. He will source the clients through listing and contacts and normally, prepare the paperwork to seal the deal. Since nothing in life is free, you will have to pay him a commission if he sells the property for you as this is the compensation for his services. Technically, there is no law that standardizes real estate commissions. The industry itself standardizes it however; the percentage really boils down to negotiation. That said it is perfectly legal and possible to low ball the agent to some extent. Here are some ideas on how to go about it.
- Determine what services will be included. Normally, the higher the commission, the more services the real estate agent will provide you. For instance, should you want the agent to do everything from listing your property and sourcing the clients to showing the property and finalizing the paperwork then obviously, the percentage of the commission should be higher. Hence, if you plan to sit on your butt and allow the agent to do everything for you, know that you probably can’t negotiate a lower commission rate. Now, you can significantly reduce the percentage of the agent if you are willing to do some of the work such as take of the inspectors, clearances, and some of the other paperwork. The fewer services required, the higher the chances you can negotiate a lower commission rate.
- Hire a newbie. Hiring a more experienced real estate agent will entail paying a higher commission. It is the nature of things. While you can maybe negotiate the commission percentage to a lower one with a seasoned agent, you will have better results by hiring a newbie or fresh one. Yes, the newer agents will settle for any commission just to get the listing. Hence, if you are that shrewd and greedy, then hire a newbie and low ball him significantly. He will still welcome the opportunity.
- Provide exclusivity. It is possible to hire multiple real estate agents to peddle your property around. In fact, this is probably the best way to get your property sold fast. However, since you are looking to pay out a lower sales commission, you might want to consider just hiring one and giving him the exclusivity to the property. This means, only he can market the property, look for the clients, and process the sale for you. By providing exclusivity, you can negotiate for a significantly lower commission payout for the sale.
- Don’t be shy. A lot of people may be too shy to ask their agent for a reduction in commission percentages, especially when the agent is a sly and smooth talker. This is common. However, remember that you are the seller and that the agent makes money off of your property sale. Hence, you call the shots. Do not be shy or embarrassed to ask for a reduction straight out. In fact, most agents are waiting for that since it is normal in the industry to undergo a little haggling. Hence, if you think you are getting the raw end of the deal, make sure to negotiate the rate without fear.
If the agent declines because you lowered the commission too much, don’t
fret. With the economy down in the gutter, there will be dozens of
agents that will be willing to take on the listing for the low
commission you specified.