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We are preparing to put our house on the market. We live in a unique neighborhood that is very desirable where houses don't come up for sale very often.
Our next door neighbor's house went on the market 2 weeks ago and sold after the open house. It received 7 offers and sold for 50,000 above list. No showings were necessary.
Our house is similar (except more updates with more beds and baths) and I expect something similar to happen when we list. The house will be in the 400-500K range which is well above the median sales price in this area. I don't want to jinx anything, but the prospects are good given the market right now.
My question is, should I ask for a reduction in commission and if so how much? I think an agent is valuable and don't want to short them for their work, but I imagine that they will really want this listing. I would appreciate pricing help as well as help dealing with multiple offers, but I can't imagine this house will be on the market more than 1-2 days.
I know the work is worth something, but not sure it's worth 6%. However, I don't want to insult the agents.
Is it typical to negotiate a lower rate if a quick sale is anticipated? Tiered rates depending on how long on the market?
Thanks!
Every commission is negotiable. Just bear in mind that a typical 6% commission is not going solely to the listing agent; it's split 50-50 between the listing agent and the buyer agent. So you need to make sure that the buyer side commission is at least competitive with the current market, otherwise you might be limiting your buyer pool, as agents have definitely been known to not actively push listings that pay a lower than average commission (flame away, but let's be honest: this has been known to happen).
That being said, if your neighborhood is that desirable, you should probably be able to push a good bargain.
Every commission is negotiable. Just bear in mind that a typical 6% commission is not going solely to the listing agent; it's split 50-50 between the listing agent and the buyer agent. So you need to make sure that the buyer side commission is at least competitive with the current market, otherwise you might be limiting your buyer pool, as agents have definitely been known to not actively push listings that pay a lower than average commission (flame away, but let's be honest: this has been known to happen).
That being said, if your neighborhood is that desirable, you should probably be able to push a good bargain.
I've heard this, but how common is this really? If most buyers are like me, they search online for houses that come on the market and ask to see them. If I was specifically looking for a particular neighborhood, there is no way an agent would be able to talk me out of seeing it.
I could be wrong, but I would have thought this would have been a bigger deal before the days of online listings..
We had the same situation recently and asked agents what is the lowest commission they would accept given the likelihood of a sellers' market. I was told by 3 different agents they would accept 5% and that is what we went with.
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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It depends on how many listings they have and how many homes are on the market. If as you say, they are in short supply you may get a decent discount. I would ask for a lower rate with incentives for anything over purchase price, to provide motivation but still save you some money.
I've heard this, but how common is this really? If most buyers are like me, they search online for houses that come on the market and ask to see them. If I was specifically looking for a particular neighborhood, there is no way an agent would be able to talk me out of seeing it.
I could be wrong, but I would have thought this would have been a bigger deal before the days of online listings..
This is very common, actually. If a buyer's agent has a written employment contract with their buyer for them to be paid 3% (negotiable), but the listing agent is only offering 2% per the MLS, (as the MLS is a contract between agents) then the buyer gets to bring cash to closing for the difference.
If your price is $400k, then the buyer gets to pay $4000 in addition to their closing costs. How likely is it that the buyer would cross this house off their list because they don't want to pay an additional $4k on top of the price they're paying? Very likely.
But most of all, what kind of taste does the buyer have in his house for a seller who isn't willing to pay their buyer's agent the "going rate" for the area? It's an immediate thought of how negotiations are going to spiral downwards and repairs will probably be cringed at... and then the buyer talks themselves out of viewing it because of their perception of how the seller might be... goes full circle...
Just bump up the price a few k to cover that 1% and that can go to commission and everyone gets to split that 6% you get your price and everyone thinks they got a deal. Especially if you feel that the house will sell quick for higher than asking. And you can always cine down a but to "make the deal happen"
If a buyer thinks he got a great deal then he got a great deal.
We are preparing to put our house on the market. We live in a unique neighborhood that is very desirable where houses don't come up for sale very often.
Our next door neighbor's house went on the market 2 weeks ago and sold after the open house. It received 7 offers and sold for 50,000 above list. No showings were necessary.
Our house is similar (except more updates with more beds and baths) and I expect something similar to happen when we list. The house will be in the 400-500K range which is well above the median sales price in this area. I don't want to jinx anything, but the prospects are good given the market right now.
My question is, should I ask for a reduction in commission and if so how much? I think an agent is valuable and don't want to short them for their work, but I imagine that they will really want this listing. I would appreciate pricing help as well as help dealing with multiple offers, but I can't imagine this house will be on the market more than 1-2 days.
I know the work is worth something, but not sure it's worth 6%. However, I don't want to insult the agents.
Is it typical to negotiate a lower rate if a quick sale is anticipated? Tiered rates depending on how long on the market?
Thanks!
There's nothing wrong with negotiating the commission. In my area, 5% commissions are highly common and it's unusual to see 6%.
So, of course you can negotiate it down, but be reasonable.
Also, if you are very confident in your house, you could try selling yourselves (assuming you don't have an agent already). That way, you only have to pay for the buyer's agent which is, again, negotiable.
Our first house we sold the agent did a rising scale for commission. The quicker the house sold, the lower her commission was.
That seems like it should be in a textbook as an example of the principal-agent problem. Why would you give somebody an incentive to be slow?
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