Negotiating Real Estate Commissions

Real estate commissions are the most expensive part of selling a piece of property. These commissions are going to eat into your profit substantially. Because of this, it could be in your best interest to negotiate the commissions. Here are a few things to consider about negotiating real estate commissions.

When You Can Negotiate

Typically, real estate commissions are not something that you can negotiate throughout the entire process. In most cases, you are going to want to do this on the front end of a listing. When you are looking for a real estate agent, this is the best time to negotiate a lower commission. In order to get your business, real estate agents will sometimes agree to taking a lower commission. Sometimes, you can use quotes from real estate agents as leverage in negotiations with other agents. This means that you are going to want to get something in writing when you talk to a real estate agent about her commission. This way, you can enter into negotiations with another real estate agent and have the proper information on hand.

Buying and Selling

In many cases, an individual is going to sell his existing home and then immediately purchase another home in the same area. When this happens, you could choose to work with the same real estate agent for both transactions. When you do this, she is going to get two different commissions. Real estate agents love this scenario as it increases their overall volume. This is also a good situation for you, as you could potentially ask her for a discount. Since you know that you are going to do two real estate transactions in a very short time, you should mention this to your agent before signing up with her. Most of the time, she will be willing to give you a discount for this process.

Dual Agency

Another situation in which you could potentially ask for a discount is if dual agency is occurring. Dual agency is a scenario in which one real estate agent is going to represent both the buyer and the seller in a real estate transaction. This means that she is trying to get what is best for both parties. In many cases, this can lead to a conflict of interest. In fact, some states have made this process illegal. However, if this is legal in your area, it could be a way for you to get a discount on your real estate commissions. When you are listing your property with a real estate agent, you will want to bring up the issue of dual agency. You can then put a contingency into the contract as to what will happen if the real estate agent represents the buyer also. In that case, you could specify that the commission is reduced since she is going to be able to get both the buyer's and seller's commission.

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