How to Negotiate Commission with Real Estate Agents to Get the Best Deal
If you’re selling a home, you’ll likely work with a real estate agent. Real estate agents usually don’t earn a base salary; they work only on commission. The rate can be a percentage of the selling price or a flat fee. Did you know commission rates are negotiable?
Commission fees are usually a significant expense. Yet, despite the cost, reports show that only 31% of sellers ask for a lower rate. When selling your home, a lower commission rate can help you save money. Bargaining with a real estate agent is a skill. Use these negotiation skills seminar tactics to walk away with more money in your pocket.
Learn about your local housing market
Negotiation seminars stress the importance of gathering information before you ask for a lower rate. Knowledge is power when it comes to securing a great deal. Knowing details about your local area can strengthen your bargaining position.
First, find out the true value of your home. Real estate agents may be more willing to negotiate if your home value is higher than their average. Commission rates are a percentage of the selling price. For agents, therefore, selling a home with a higher value increases their earning potential.
Not sure where to start? Head to the Bureau of Internal Revenue (BIR) website. The BIR shows an area’s zonal value per square meter. You can also look at properties for sale within your location. Take note of size, features, and locations.
You can choose to have your house appraised by a professional. However, appraisal services come at a cost. So, bear that in mind when requesting a valuation.
Talk to multiple agents
Speaking with various agents is another strategy taught at negotiation seminars. Commission rates are not standard. Fees can vary from one agent to the next. Every negotiation needs a starting point. Talking with different professionals gives you an idea of what to expect.
Aim to speak with at least three agents in your area. Make sure each professional has the expertise for your type of real estate. For example, if you’re selling a home, talk to a residential expert, not a commercial one. Also, try to speak with agents from both large and small firms. Companies have different discount policies. Those rules impact how much an agent can drop their rates.
Find out the agent’s rate as well as their willingness to negotiate. It might be tempting to go with the cheapest agent. However, it’s often better to choose value over price. A skilled real estate agent may be able to get a higher sales price for your property. Try also to avoid dismissing agents who offer a small discount. A 1% drop in commission rates can save thousands in some cases.
Don’t forget to ask for a complete list of services that come with the agent’s rate. Agents base their fees, in part, on what services they offer the seller. Eliminating or reducing services you don’t need may open up room for negotiating. For example, if you list your property online only and not in print, you can reduce how much the agent would spend on advertising.
Use timing to your advantage
The art of timing is a powerful bargaining tactic taught at negotiation seminars. Knowing when to ask an agent to lower their fees can impact the outcome.
For example, the real estate sector has peak and off-peak seasons. Agents typically have less business during the off-season. As a result, agents may be more willing to drop their commission to secure business.
Also, consider timing your sale for when your property is move-in ready. There’s a high demand for homes that are ready for immediate occupancy sell. Not only do these types of properties sell quicker, but there’s also less for the agent to do. As a result, agents may be more open to negotiating their rates.
Learn how to negotiate
Many people hesitate to negotiate because they lack skill and confidence. Many people also assume that negotiation is only a natural skill. Yes, some people do have an innate talent for persuading others. However, knowing how to bargain well is more of a learned ability.
With practice, most people can become competent negotiators. To build your confidence and ability, start asking for discounts on small things. For example, you could ask for a discount at a coffee shop or at a farmer’s market. By bargaining for small things frequently, you’ll gain the confidence and ability to negotiate larger things down the road.
If you have a lot of high stakes negotiations in your future, seminars are also great places to learn powerful persuasion tactics. The tips you pick up may prove useful for securing a lower price on your next property.
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