Back in 2014 an article, Things Real-Estate Agents Won’t Tell You, was published in The Wall Street Journal. In this series of blog posts, I’m going to address some suppositions from that article.
“Real estate agent commissions aren’t set in stone.”
This part of the article suggests that commissions are not fixed. Let me just say this is true! It is also true that some real estate agents will never or rarely discount their commissions and that some Brokerages strongly encourage their agents NOT to reduce their commission.
I know some agents who do, some who don’t offer discounts, and seller beware because the old adage “you get what you pay for” often comes into play. The amount of commission is set forth in the listing agreement presumably during a listing appointment with the REALTOR and the seller. The fact that there is a blank in which a commission amount is entered in that document demonstrates that commissions aren’t set in stone. Sellers should know that in most instances half of the negotiated percentage goes to the buyer’s agent and this fact is also spelled out in the listing agreement. So if you are selling your home, be aware that the person sitting across the table from you, who you are trusting with one of the largest financial transactions of your life, will further share their remaining commission with their broker, and will spend their own money on marketing, open houses, signage, etc. before ever receiving a penny of commission.
Many experienced agents I know will not negotiate their commission, knowing that they work hard for their commission percentage. Some agents have a varied commission structure providing fewer services for a discounted commission and some agents work for discount brokerages offering a flat rate (paid up front) listing. With the risk of sounding like a broken record, you get what you pay for.
Before you ask an agent to cut their commission consider how you would feel if a client came into your office, consulted with you about a big project and then asked you to give them a discount. What reason could they offer that would lead you to agree to that? If you ask your REALTOR to cut their commission and they agree quickly, what does that tell you about their professionalism and their ability to negotiate on your behalf?
If you are getting ready to sell and you decide to speak with a few agents, I strongly advise you not just focus on the commission, looking solely at dollars you might pocket! Also be keenly aware of what you are sacrificing (an experienced agent, a great marketing strategy, a good communicator, an expert guiding you from the list till close).
My real estate clients benefit from my experience, guidance, and knowledge. When I tour their home, review the listing agreement, explain what steps I will take to market and get their home sold, I am rarely questioned on my commission. I think most sellers want to engage a professional who knows exactly what to do to protect their interests and get their home sold.
If you are getting ready to sell your home and have any questions about the process or if you’d like a complimentary comparative market analysis, give me a call.