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Can You Negotiate Realtor Fees? Here’s How You Do It

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negotiate realtor fees

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In the U.S. in 2023, 4.3 million existing homes were sold. A majority of people who sell their homes do so with the help of a real estate agent, though others choose to go it on their own to avoid the hefty realtor commission.

While hiring a real estate agent often takes a piece of your profit from the sale of your house, many people don’t realize how much work selling “for sale by owner” really entails. If you are hoping to save money on realtor fees but aren’t excited about the idea of selling your house without an agent, you might be interested to learn more about negotiating realtor fees.

Is it possible to negotiate with a realtor commission, and is it something you should consider doing?

Let’s take a look at what you need to know about negotiating fees with your real estate agent.

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Realtor Commission: What You Should Know

A typical realtor commission rate is 6%, though this isn’t necessarily always the case. This fee is usually split in half between two real estate agents. These are the listing agent who works with the seller and the buyer’s agent who represents a client that is purchasing the home.

These fees are usually included in the home’s price, meaning that realtor fees are commonly taken out of the proceeds of the seller. What this does is allow the buyer to cover realtor fees with their home loan rather than paying cash for the service.

How Much Does a Realtor Make on a Home Sale?

Assuming that both real estate agents are splitting a 6% commission, each realtor would take home 3% of the sales price of the home. That means that they take $18,000 out of the profits of the seller, each one receiving $9,000 for their part in the transaction. However, individual realtors then often have to split their commission with their brokerage, which reduces their actual take home.

Are Realtor Fees Negotiable?

No matter what a real estate agent or broker tells you, the commission rate they receive for helping you sell your home is technically always negotiable. That being said, there are a number of different factors that will influence your ability to negotiate for a lower commission rate and how much lower a realtor will be willing to go. In the next section, we will take a detailed look at some of the different factors that can affect realtor rates.

It can be difficult to negotiate realtor fees. You might find that you don’t get the price reduction you are hoping or even if you do successfully talked down your real estate agent.

What Factors Affect Realtor Commission Rates?

If you are considering negotiating with a realtor about commission, there are a number of factors that you’ll want to take into account. These factors can also help you determine how much leverage you have in terms of negotiating for a lower rate.

Local Buyer Demand

Agents might be open to a lower rate if you’re in a market where properties sell quickly. If they have some certainty that selling your home won’t take a lot of their time, energy, or attention, they might be more willing to reduce their rate.

Price Point

The more expensive your house is, the easier you will find it is to lock in a lower rate. If you’re selling a luxury home, it is already standard for the rates to be lower without having to worry about negotiating.

Time of Year

During times of the year when there aren’t many new listings or in low-inventory markets, realtors might be more willing to work for lower commission rates. Since they are in lower demand, they can be more interested in having a client than receiving the full 3% commission.

Desirability of Home

If your home doesn’t seem like it will sell quickly or easily, for example, being in a bad location or in disrepair, a real estate agent might not be as interested in reducing their commission rate. On the other hand, agents might be more motivated if your house is highly desirable.

Experience of the Agent

Agents who have been in the game for a long time might not want to budge on their commission as they are in high demand and know their worth. Less experienced agents might be more interested in boosting their sales and experience then getting the full rate. That being said, not all brokers allow their agents (particularly newer ones) to drop their rates.

Negotiating Fees: Should You Do it?

Selling a house is a very expensive thing to do in one of the biggest costs associated with it are the realtor fees. Even if you are able to receive a small reduction in the fee, it could mean that you end up saving thousands of dollars. While there’s no certainty you’ll be successful, it’s enough money that it’s worth at least trying.

Tips For How to Negotiate With a Realtor about Commission

If reducing your realtor fees is something that you want to accomplish, there are a number of things you can do to help increase your chances of being successful. Let’s take a look at how to boost your odds of saving money on those fees.

Make the Real Estate Agent’s Job Easier

All real estate agents now, some clients are a breeze to work with while others are a bit more of a piece of work. Show your realtor that you are enthusiastic about selling your house and that you want to be cooperative in the process. If you make it clear that you are willing to make their job easier, they will be more likely to give you a lower rate.

Make Your Home Easy to Sell

As mentioned earlier, a real estate agent will be more flexible with their fee if they think that your home will be easy to sell. Houses that have been well maintained and are not littered with clutter or in need of repair are generally much easier to sell.

Are you wondering how to prepare your house for sale? Check out these nine tips.

Sign on As Their Buyer Client, Too

When you are selling your home, maybe you are doing so to purchase another home in the same area. If you agree to sign on with your real estate agent as a buyer as well, they might be willing to lower the realtor rate. They might be happy to receive a lower overall rate in order to lock in another sale.

Don’t Be Greedy

If you have decided that you want to save money on real estate commission and therefore negotiate for a lower fee, it is best to not demand the highest quality, luxury marketing materials. This might include videography and video editing, drone photography, or other elaborate marketing tactics. Allow them to use the tools they traditionally use to sell your home.

Let Your Realtor Do an Open House

Real estate agents are always looking for new clients. You can allow your realtor to use your listing as a lead generating if you give them the opportunity to have an open house. Open houses are a great way for a real estate agent to network with people who are newly looking for a home in the same area.

They also might suggest that you do an open house because your home is particularly suited to join great attendance.

Tell Them You’ll Provide Referrals

You could also offer to provide referrals for your agent in a way that might make them find negotiating your fee more appealing. It takes a lot of time, energy, and money to acquire new clients, so your agent might find this offer appealing. When they understand that you might be a source that continually generates referrals for your agency, they might calculate a reduction as worth the cost.

Come In With a Number

When negotiating, you should actually come to the table with the lower fee you are looking for. Tell them how much you would hire a real estate agent for and state that you are willing to commit right away at that particular fee.

This is better than bringing the topic up vaguely, which likely won’t lead to your desired outcome.

Negotiating is a skill that can take practice, and it’s easy to get mowed over by a more experienced negotiator when you are new to it. Real estate agents make their living negotiating with other agents as the intermediaries between buyers and sellers. When you show up with a firm number and a desire to commit, this gives you a better chance of achieving some success.

Whether or not you are actually willing to negotiate beyond your number is up to you. It might be worth your time to learn some of the basic negotiation tips to help prepare you for the experience and give you the best chance of getting what you want.

Sign on During a Slower Market

Most local markets have a time of the year when the market is at its peak and a time of year when the market is slow and dull. If you sign on with a real estate agent during the slow season in your location, you have a better chance of locking in a lower rate. If paying less for your real estate agent commissions is a high priority for you, consider hiring a real estate agent when they are not in high demand.

Can You Avoid Hiring a Real Estate Agent All Together?

You certainly don’t have to hire a real estate agent, and some homeowners choose to sell their house “for sale by owner” or FSBO. Are there any options other than becoming your own real estate agent, though?

Absolutely. If you choose to sell your home to a cash buyer, it means that you won’t have to deal with any realtor fees, closing costs, or the major hassle of listing your house on the open market.

With a trusted iBuyer, selling your house is quick and easy. All you have to do is enter your home address and you’ll be provided with a free estimate of your home’s value. This is accomplished by accessing neighborhood statistics and pulling market value data in your location.

You can then set up an iBuyer.com instant offer account. Here you can verify details of the home that are important for the cash buyer to know. From there, you can sit tight and receive the best cash offer available delivered to you in a secure and direct manner.

Do You Want to Avoid Realtor Fees Altogether?

Negotiating realtor fees can be a great way to say several thousand dollars when you’re selling your home. For some buyers, the cost of paying for a real estate agent is worth it to them. For others, the cost of the selling process along with the long-drawn-out nature of the traditional market leaves them looking for other avenues entirely.

If this is you, you might be interested in selling your house to a trusted iBuyer. When you sell to an iBuyer, you don’t have to do any repairs, cleanings, showings, staging, open houses, or any of the other things that are traditionally associated with listing your home on the market. The whole process is also so much faster than the open market that your house can practically be sold and closed on before you would even have gotten your house listed on the MLS.

Are you wondering how much an iBuyer would buy your house for? You can find out in minutes right here!

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