There are expenses you have to cover when selling or buying a house in Bruce Township, Michigan. One of these expenses is the commission fees of your real estate agent, which typically amounts to around 6% of the home’s sales price. The good thing is you can negotiate agent’s commission fees to reduce the costs associated with selling or buying a home. 

Yes, the commission fees of real estate agents are negotiable, but your success on the negotiating table depends on several factors. On your part, it’s crucial to know the reasons agents will agree to a lower commission fee. 

In this blog post, we give you some guidance on how to effectively negotiate real estate agent’s commission fees. 

Reasons Real Estate Agents Might Accept Lower Commission Fees

Many real estate agents will stick to the industry standard 6% commission fee, making it difficult for home sellers and buyers to negotiate. However, you can sway these agents on your side if you know how to negotiate. After all, there are circumstances that real estate agents might accept your counteroffer. 

• If the agent has less work to do in the transaction, there’s a high chance that he might accept a lower commission fee. For example, an agent helping to sell a move-in ready house has an easier time making a successful sale of that property. In this case, offering him a lower commission fee is possible. 

• In a buyer’s market, real estate agents might agree to a lower commission fee since they won’t have to put in more effort in finding a house because of the high housing inventory. Also, it’s unlikely to get into bidding wars to win over home sellers in this type of market. 

• If you hire an agent to sell multiple houses or to purchase and sell simultaneously, you can negotiate with the agent to reduce the commission fee you have to pay. 

• Agents are willing to negotiate commission fees when your property has a high listing price. A large sale means a large commission, and you can ask for a lower than 6% commission fee in this case. 

• Home sellers and buyers who are willing to do a portion of the work of the agent can avail of an affordable commission fee. 

Tips for Negotiating with Your Real Estate Agent

Probably, you now have an idea on how to start your negotiation with your agent from the above-mentioned circumstances. In this section, you’ll know some tips and ways on how to make your negotiating skills more effective. 

Study the Real Estate Market

If you know the market, you'll have more leverage at the negotiating table. Make sure to study your local real estate market to score some talking points with your agent about why paying a lower commission fee is reasonable. 

For instance, sellers can discuss some features of why the home sale will be an easy and profitable job for the agent and support this claim with market data. It’s crucial to be familiar with the average commission rate in your locality to have a solid ground for your request. 

Put House on Sale in the Offseason

From November to February, selling activity tends to become slow. Real estate agents also have little business during this season since home buyers are waiting for the arrival of spring. Therefore, it’s an excellent opportunity to sell your property during the offseason if you want to pay lower commission fees. 

Real estate agents may be willing to work with you for a lower commission fee to have some business going. However, the catch with selling in these slow months is the possibility of having your property sit for a longer time in the market. 

Offer Agents with More Transactions

More real estate transactions, more money for agents. If you’re an investor in need of an agent who can help you buy and sell multiple properties, ask the agent for a lower commission fee for these multiple transactions. 

Work with a Low-Commission Brokerage

The success of your negotiation with a real estate agent for lower commission fees is not always guaranteed. That’s why working with a low-commission or discount brokerage is perfect for you since you don’t have to negotiate.

This type of brokerage offers more affordable commission rates than a traditional brokerage. Most discount brokerages provide buyers with up to 50% commission refund at closing and sellers with zero upfront fees and only a 1% listing fee at closing. 

Takeaway

Negotiating with real estate agents for lower commission fees is crucial if you want to cut the cost of a home purchase or home sale. To have a successful negotiation in your favor, you must know the common reasons agents would likely accept your counteroffer. You also need to study the market to have some leverage in the negotiation.