Negotiate real estate commissions
By Justin Hunter
Deciding to sell your home is an important decision
because after all it is not just a house, it is home.
There are so many things to think and worry about during
this time that commission fees are probably farthest
from your mind. This is what a real estate agent is
hoping; that you won’t care about how much extra
you are paying.
The ezinearticles.com article, “How To Negotiate
Real Estate Commissions When Selling
A House ‘As Is,’” written by Kris
Koonar, explains how to stay on your toes to avoid overpaying
for commission fees.
A real estate commission is paid to the agent or broker
as a fee for finding a buyer. To avoid paying too much
for commission fees, you are encouraged to learn as
much as possible about commission rates and the process
in general.
“In reality, the commission rates are never fixed
and most of the states forbid the Real Estate Commissions
from doing so.
This means that the agents
can quote any price they like as long as the customers
are willing to comply with the demands. However, this
does not imply that the customers are compelled to pay
the stated rates; they have the option of negotiating
as much as their negotiation skills allow them to. The
competition factor between agents also helps keep the
commission rates from soaring too high.”
In order to negotiate, you need to have a basic understanding
of the commissions’ rules.
Realty companies usually set the minimum and maximum
rates of commission and allow agents and brokers to
finalize the fee within that range. But agents are not
allowed to discuss their offered commission rates with
other agents working for other companies, and no realty
company is allowed to advertise any commission fees
rates.
“The commission to be paid to the seller's agent
is decided when the listing contract is being drawn
and the commission payable to the buyer's agent is determined
when the contract for the sale of the estate is being
written. Usually, the total commission is divided equally
between both the agents.”
There are several tips to use to help even the shyest
homeowner negotiate lower commission fees.
Knowledge is very important. Study and calculate the
value of your home compared to its condition, amenities
and location, and estimate how much would be an ideal
or expected commission charge.
“Enquire about other homes in your area that have
been put up on sale and find out how much those owners
are paying their agents.”
“Keep a track on the market
trends, whether it is favoring the sellers or the buyers.
In case it is supporting the sellers, then the negotiation
power lies more with the sellers.”
One of the most helpful tips is to make a precise budget
on how much you will spend on commission fees. No matter
what, do not go beyond that amount, even by a dollar.
This will indicate to the agent that you are serious
and know what you are doing.
“Before hiring an agent, make a background check
to see if he is adequately qualified to carry out the
job. Carefully observing the agents' weaknesses and
use them to your benefit.”
You should also feel free to discuss payment options,
if you do not want to pay
one large sum.
Many people feel uncomfortable negotiating fees, especially
if it is a difference of a couple of dollars, but every
dollar makes a difference, and successfully negotiating
one thing will provide you the confidence you need to
negotiate other fees, such as mechanical costs, in the
future.