When using the same real estate agent to sell your home and
buy another, is the commission, which in this case is 6 percent,
negotiable? With the market so hot, is it possible to pay
the agent, say, 4.5 percent?
Although commissions of 6 percent are pretty standard,
real estate fees, by law, are negotiable. In a red-hot market
with higher home values, it is certainly not unheard of to
offer 4.5 percent or even 4 percent in a double deal, although
I wouldn't posture much lower than that, lest you may start
suffering from indifferent representation.
Even with slightly reduced commissions, most
agents will jump at the chance to get your action on both
the selling and buying ends, because of their hope of a "sure
thing" on the second leg of the arrangement. The scenario
may even motivate them to market your current house more aggressively
to expedite the purchase of the new home.
However, some hot-shot real estate agents with
a reputation of extracting the maximum value from a sale may
not want to work for less than 6 percent, especially on a
lower-value sale or purchase. For a $150,000 home, for example,
it may be tougher to find quality representation at much below
6 percent. For a $600,000 home, your odds are much better.
Fees, by the way, should always be established in writing
at the time an agent is contracted.
Of course, if you're buying a new home, you
probably don't need an agent and can negotiate directly with
the builder and may be able to get better upgrades or additional
amenities with the money that you save your builder.
But in a conventional deal involving an existing
home, your agent will probably prioritize higher-paying clients,
and your home may be slower to sell if you get too stingy
on the commission side.
Remember, there probably will be an agent representing
the person who's purchasing your house and an agent representing
the seller of the house you will buy. In other words, the
pie may be divvied into smaller slices than you might think,
and commissions from both deals will be split with other agents.
If your agent is part of a company or franchise system, he
or she will have to sacrifice an additional chunk of that
commission to the employer to cover overhead and marketing.
But by all means, be a shrewd (but fair) negotiator
in the commission game. In an active, high-priced market peopled
by an abundance of real estate agents, you can usually whittle
a point or two off that 6-percent standard, especially on
a two-transaction deal.