If you are paying 6% in real estate commissions you may be paying too much. Commissions are always negotiable. There is no set rate and it is a violation of anti-trust laws for agents or brokers to discuss commissions outside of their own company. In other words, we can not compare our rates or agree to all charge the same amount.
If you do some research you will notice that there aren’t any price lists out there. Most of us will negotiate and as a result, our rates may not be the same across the board.
The reason why real estate agents charge a percentage of the sale price of the home is because even 6% sounds better than 18 or 40 thousand dollars.
Real estate agents will say that you get what you pay for. I haven’t found that to be true. New agents tend to charge as much as experienced agents. Experience really matters. New agents rarely have a clue as to what it is they don’t know.
Negotiate with your real estate agent. If the agent will not negotiate go ahead and assume that they don’t know how to and hire someone who will negotiate.
Also, keep in mind that real estate agents are usually independent contractors who do not make any money until they sell a house and that sale closes.
I have used the fact that many homeowners believe that there is a going rate to my advantage. The rate is often more than I plan to charge and it enables me to start negotiating at a higher level.
Most real estate agents I know do work hard but many make it sound as though they are doing God’s work and selling real estate is the hardest and most important job there is.
It is important to keep our perspective.
