If you're thinking about selling your home, you're probably wondering how much you may have to fork over in real estate commissions.
Real estate commission fees are the charges that real estate agents and brokers tap on for their services. These fees are typically a percentage of the home's sale price.
Commission fees are often your biggest expense when selling. So, it is a good idea to negotiate them before you sign with an agent. Here are the top negotiation tips drawn from an acclaimed negotiation course that you can use to soften the blow of commission fees.
Not all real estate agents charge the same commission fees. The average real estate commission fee is between 5 - 6%. However, this fee is not fixed. It can vary depending on the agent or broker you work with, the market, and other factors.
Also, some agents choose to charge a flat fee instead, which may or may not be lower than going down the route of a percentage commission. So, it pays to shop around. You may also be able to get some information from someone you know who has recently sold a home in your area. You could also scour the internet (Google etc.) for a commission fee calculator and use that to determine the average for your area.
Interview several real estate agents
Before you start the negotiation process, interview multiple agents. Real estate negotiating training courses suggest talking to at least three agents.
Try and talk to different real estate companies or agents to get an idea of what and how they charge. Interviewing multiple agents helps you get a good idea of the typical commission in your area. You can use that information to figure out what to pay.
Make sure to inquire about any hidden fees or extras that may be added on top of the commission fee. Also, comb through their experience and qualifications. You want to feel confident that you're working with someone who knows the ins and outs of the local real estate market.
Share the work
Some real estate agents may be willing to cut their commission if you offer to reduce their workload.
For example, if you’re a photographer, see if you can get a discount for providing professional pictures of the home you are selling for their channels. Or, if you are selling and buying at the same time, ask the realtor if they are willing to discount their fee if you use them for both transactions.
Consider selling in the off-season
The real estate market has seasonality to it. For example, home sales tend to move like molasses in the winter months in most areas. The holiday season and the school year also have a tremendous impact on market supply and demand. According to Zillow, homes tend to sell like “hotcakes” in March.
Negotiation training courses say that you can use this seasonality to your advantage. Inventory is usually low during the off-season so agents may struggle to find work. So, some may be willing to lower their commission fee if you agree to sell your home during the off-season.
However, there is a downside of selling in the off-season. While you may succeed in negotiating a lower commission fee you, may have to wait longer to find a suitable buyer.
Vacate your home early
An agent may be willing to negotiate their fee if you vacate your home early. That's because it gives your agent the chance to show it off in its best light.
Potential buyers will be able to see your home without any personal belongings getting in the way, and they'll be able to imagine themselves living there more easily. Plus, an empty home is typically more appealing than a lived-in one, so you're more likely to get top dollar for your property.
If you do decide to vacate your home early be prepared to leave your home in pristine, show-ready condition. A show-ready home is one that is decluttered, sparkling clean, and any necessary repairs are done.