How to Lower Your Real Estate Agent’s Commission on Home Sales
When buying or selling your home, the real estate agent’s commission can be a significant part of the total cost. That is why it is essential to understand what you are getting into before working with one.
Real estate agents typically charge between 5-6 percent of a home’s sale price, though this percentage may differ by region.
Does the Commission Cover All Expenses?
Yes, your total commission on a home sale includes both listing agent’s and buyer’s agent fees as well as any broker fees. The broker’s fee is paid to the brokerage and may include things like desk fees, office space rental costs, insurance premiums – anything necessary for doing business in real estate!
Many new agents are seduced by real estate brokerages’ high commission rates and low flat fee pricing. They mistakenly believe they’ll make more money with a flat fee instead of a percentage, but this isn’t always the case.
Real estate agents have several ways to reduce their commission rates. You may ask your agent for a rebate of the commission amount.
This technique isn’t widely used in New York, but it can save you money over time by reducing overall commission fees on your sale. However, it’s wise to consult your agent first since this type of rebate may not be commonplace at brokerages.
Another alternative is to negotiate a flat fee with your agent. This tends to be cheaper than paying a percentage fee, however it does limit their negotiating power.
Finally, you may want to search for an agent who offers a 1% discount on their commission. This can be an excellent way to save some cash and expedite the selling process of your home!
In high demand markets, commission rates are likely to go up. On the contrary, if your real estate agent is working in a slow or low demand area, they may be more willing to negotiate lower commissions for you.
A qualified broker should be able to guide you through all your available choices and help determine which is most advantageous for your specific circumstances. They also offer more precise estimations of how much your home will sell for.
Are Commissions Paid on Gross or Net?
When selling a home, the commission you’ll pay will be split between the seller’s agent and buyer’s agent. As such, you’ll pay part of the home’s price to the listing agent, while paying more to the buyer’s agent.
In most real estate markets across America, the average commission is currently 5%. This has been steadily declining over recent years and is typically associated with slow economic periods. That’s why real estate agents often negotiate with you to get a lower commission rate.