Negotiating commission with a realtor is fairly common and can often be done respectfully and successfully if approached the right way. Here’s a practical outline on how to negotiate:
1. Understand Standard Commissions First
- Traditional real estate commission has been 4–6% of the home’s sale price, typically split between the buyer’s and seller’s agents.
- However, commissions are negotiable by law — there’s no fixed rate.
2. Prepare Your Case
Before you negotiate, think about:
- Market conditions: If it’s a seller’s market (low inventory, high demand), agents may be less willing to reduce their commission. In a buyer’s market (more inventory, fewer buyers), they might be more flexible.
- Property attractiveness: Easy-to-sell homes (move-in ready, desirable location, popular price range) are less work for the agent, making a discount more reasonable.
- Price point: Higher-priced properties sometimes warrant a lower commission percentage because the agent still makes a solid amount.
- Your readiness: If you’re a serious, ready-to-go client (or if you’re offering multiple deals, like selling and buying through them), you have more leverage.
3. How to Approach the Conversation
- Be respectful: Recognize the agent’s value and workload.
- Be direct but polite: Example:”I’m committed to working with you and really value your expertise. Since the home is in a great area and priced competitively, would you be willing to adjust your commission to X%?”
- Offer something in return: Shorter listing agreement, quick sale timeline, or commitment to use them for both selling and buying.
- Talk specifics: Instead of asking “Can you lower your commission?” you could say,”Would you be open to 5% total commission instead of 6%?”
4. What to Expect
- Some agents have little flexibility, especially if they work under strict brokerage policies.
- Others might say yes outright, or counter with a different offer (e.g., lower commission if the home sells within 30 days).
- Be prepared for them to explain what services they provide and how that justifies their rate.
5. Alternative Options
- Tiered commissions: Higher commission if the sale price exceeds a certain threshold.
- Flat fees: Some agents agree to a flat listing fee instead of a percentage.
- Limited-service agents: If you want even more savings and are willing to take on some tasks yourself, you can look into limited-service or discount brokers.