Is there wiggle room on realty fees?

Real Estate Agent with REMAX Advance Realty II 3233262

Like most business transactions,  the final terms of real estate listings and sales are open to  negotiation by all the parties involved.  Prospective home sellers might push for a lower commission rate in the listing contract because they feel their house will be a quick sale and require less effort and time by the agents involved. Rather than a “standard” 6 percent commission to be split between the listing and selling agents, the final listing deal might call for 5 percent in total commissions split between the two.   Alternatively, some listing agents might demand 7 percent in total commissions because the house is likely to be difficult to market.   Buyers are free to negotiate fees and commissions as well.Before attempting to negotiate lower fees, however, it is important for you to understand some basics:–There needs to be a strong underlying economic rationale for agents            and brokers to even consider cutting their fees. For example, if the market is booming and houses are selling almost as soon as they're listed, agents and brokers may be more likely to agree to a slightly lower commission.  The same might be true for upper-bracket houses in sought-after neighborhoods, but not so in lower-priced areas where house sales are slow.–Keep in mind that most agents must split their commissions with their  affiliated brokerage firm. You might assume that a 3 percent listing commission for the agent on a $200,000 house will yield that agent a quick $6,000, but that drops to $3,000 if the agent is working on a 50-50 split basis with his or her affiliated brokerage firm. Plus, if the sale is not quick, and requires substantial marketing and time costs by the agent and broker – both of whom have overhead expenses to defray as well – there may be strong resistance to your proposal to cut the commission rate.–Some brokerage firms offer “discount” fee plans or fee-for-service arrangements as an alternative to the standard commission model. A discount broker, for instance,  might agree to list your house for a flat fee of $495, plus one percent of the selling price, in exchange for giving you exposure on the local Multiple Listing Service,  major realty websites such as, and other services such as an online virtual tour of the property.  With  such brokers, there may be minimal willingness on to  cut fees below the listing on the menu, no matter how talented a negotiator you are.— Commissions may not be the only form of fees you encounter in a real estate transaction.  Many brokerages also impose “administrative” charges as part of listing agreements. Though they come with different names and can range anywhere from $195 to $495 – and can affect sellers, buyers or both –  they are integral parts of the total compensation package, and subject to negotiation.Bottom line:  Yes, there is wiggle room in fees. iIf the underlying conditions are favorable and you are a good bargainer, you may be able to convince agents and brokers to reduce your costs.


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