Can You Negotiate Commission With A Real Estate Agent

Are you in the process of selling your Georgia house but are hesitant to move forward because of your agent’s hefty commission price? You may not be aware of it yet, but it’s one of the reasons why some home sellers go the For Sale By Owner route.  When you sell your house through a broker who has great a reputation and performance in the industry, you can expect a higher commission percentage than other lesser-known brokers. But even if your real estate agent is in demand, it doesn’t mean that you are not allowed to negotiate their commission fee.

Just remember that at the end of the day, the chances of negotiating the price (and how much) will boil down to your agent’s situation — how much he/she is going to pay the broker, income taxes, mobilization expenses, MLS fees, etc. 

how real estate commission work
Source: The Balance

So here are some situations where your agent will most likely agree to lower their commission fee:

If Your Home Is Located in A Hot Market

If your home is in an area where other homes are selling fast (less than a week/month), your agent may consider saying yes to lowering the commission price because of two possible reasons:

  • It’s better to get money today than potentially wait for months or;
  • The agent might be able to find another listing right away after the sale

Moreover, competition with another agent can also push your agent to reconsider. There is no rule stating that you cannot change real estate agents before a contract is signed. So, if you find another agent who is open to a lower commission price, but you still like agent #1, then you can try offering agent #2’s fee and explain the reasons clearly. This is one of the advantages if you take your time to shop and interview a couple of real estate agents first.

If Your Agent Is a Newbie

Commission prices are primarily dictated by the area and the skills of your agent. Basically, you are paying your agent based on what he/she can bring to the table. Seasoned real estate agents are expected to be more knowledgeable and skilled at market analyses, negotiations, and the like, compared to novice agents; that’s why their rates are higher. Additionally, if your agent has an impressive portfolio (like closing three or more deals in a month), you can expect that it might be more difficult to negotiate a lower price.

On the other hand, if your agent has just started in the business, you might have more leeway to negotiate because:

  • Many newbie agents are hungry for the experience and training
  • New agents are still building their portfolio, so they need to close as many deals as they can
  • New agents may still have lesser operating expenses than big-time real estate agents

If You Can Offer or Refer Another Listing

Some agents don’t score clients as fast as other agents. If you can find a way to open opportunities for your agent, then you might have negotiating power.  You can ask your relatives or friends if they are looking for a real estate agent. And if they say yes to yours, then you can have your discount — just don’t forget to make a deal with your agent first before referring them. You may have to wait a little longer and work a little more to find a referral though, so this is more applicable to home sellers who aren’t in a hurry yet to sell the house.

If You Are Doing FSBO or Selling Off-Market

FSBO means you are selling the house by yourself. Unless you find a buyer who doesn’t want to go through an agent either, you’ll have to allocate for a buyer’s agent’s commission fee.  Likewise, the process here is a little different from the usual on-market sale. If you are selling the house FSBO, and a broker was interested in your home, you most likely have to sign an FSBO commission agreement before your broker shows your house to the buyer.

As a backgrounder, when real estate agents list a house on the MLS, the listing automatically sets a commission price for the buyer’s agent and places it on the contract. However, if you sell without an agent, you wouldn’t have access to the MLS, so there wouldn’t be any guarantee that your buyer’s agent will receive a commission. Hence, the separate FSBO commission agreement, or otherwise known as the one-time showing agreement. With this, you can negotiate the price before signing the broker’s commission agreement.

Despite all the possibilities of reducing the commission fee, you should still consider how much value your agent can give you.  Do you think your agent can sell your house fast? Do you think your agent can manage the entire selling process for you? Do you think your agent has your best interests at heart? 

If your agent doesn’t agree to reduce the price and there’s no way that you can reconsider, then don’t lose hope because you can still sell your house fast without your agent. Spire Home Buyers can buy your home fast for cash, and you don’t have to pay any commission price because we will buy your home directly! For more information, don’t hesitate to contact us at (678) 318-1801.


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