Some people do not hire real estate agents as they think their commission is too high. However, a lot of people do not realize that it is negotiable. To have good arguments for the negotiation you should be well-informed about the way the commission is calculated.
The real estate brokers are the ones who get commission. The agents who work for them are entitled to a certain percentage of it. Thus the commission process starts with determining the split. A common practice is for the brokers to split the commission in halves with the selling agent. If some of the agents are more productive the brokers can raise the amount they get.
If the deal is handled by both listing and selling broker, the commission will be split between them before it further gets to the agent. Thus, if the real estate agent sells the property for $100,000 and his commission is 7%, the listing broker will get 4% ($4,000) and the selling broker will get 3% ($3,000). Taking into consideration that the agent who sells the home gets about half the commission of the selling broker ($1,500) and that such expenses as franchise fee and overhead expenses are further subtracted from this amount, the total profit would not constitute that much at all.
When it is clear how the commission is earned you can proceed to the negotiation process. There are some tips that you can follow in order to make the real estate agent to go down on his commission fee.
If you ask the agent to represent you both in the selling process of your current real estate and the buying process of your new one, the agent is highly likely to lower the commission fee as he will get paid for both real estate transactions. It also helps if you hire the same company to sell your home and purchase a new one.
You can entice the agent by promising to provide more referrals. The agent understands that this is a win-win situation: you get a discount and he gets more business in future and thus more commission.
If your state does not forbid the dual agency, you can offer your agent to do it. If the real estate agent performs the function of the buyer’s and the seller’s agent he gets the commission of both the listing and the selling broker. And you are entitled to pay a reduced commission fee.
If you are going to sell a couple of real estates you can list them with the same agent. If you provide the agent with some listings he will definitely lower the commission.
You can compare the fee of your agent to other agents in the area. If you find the agent with similar experience and history record who charges less you can use this fact while negotiating with your agent.
If you are interested in finding out more about Evergreen real estate, then you should be here – on the Evergreen homes for sale web site. This is a very detailed and helpful web resource with all sorts of information about Evergreen homes for sale.
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