Is the 6% you Pay in Real Estate Commission a Figure that is Set in Stone?
All across the country, regardless what home prices look like – whether it is boom time like it was five years ago, or it’s bust like it’s been ever since 2008, there’s one thing in the whole home buying (or selling) equation that never changes – it’s the 6% broker commission that the buyer and the seller need to contribute to make up. Thankfully, homebuyers and sellers are eventually pertaining to the conclusion that there is something they can do about this; that in a tough economy whenever one needs to cut back, brokers had better taken a loss in the real estate commission they collect also. Among the reasons people are able to negotiate with that figure is that real estate models to have changed. These days, if you’re willing to do a little of the legwork yourself, there are certain real estate broker services that you can tackle to do for yourself if you’re fascinated in saving a little cash.
For example, one of the services provided by a broker that she would wish to collect that 6% commission for is the one where she advertises your house in the local classifieds. Home sellers are starting to realize that they can just pay an agent to have their listing placed on broker databases, to have their negotiating covered, and that they’ll pay nothing more than $300-$400 a month for it. And if they can go with agents all the way, they’ll ever have to pay any more than 5%. Those are serious savings. Even going with a real estate broker, the average commission paid last year was approximately 5.4%. That means there is some negotiating happening. You don’t ever have tosimply accept the 6% figure as carved in stone even if you deal with the broker’s real estate commission.
Under what circumstances might a broker accept a lower real estate commission rate?
Even if brokers claim that their 6% is totally justified considering all the marketing they put into your house and how they find you a great price and keep the difficult process of selling the house from touching you, for repeat customers, a 5% commission may be entirely sufficient.
A broker which works with a big real estate brokerage firm frequently only gets to keep half of the commission she earns on the sale. If she sells a house for you that’s worth $500,000, the 6% real estate commission on that would work out to $30,000. She needs to hand half of that over to the buyer’s broker; and then half of the remaining, she needs to hand over to her boss. She only gets to keep $7500. And then of course her expenses in promoting and selling your house come out of that. If you wish to actually have some leeway negotiating with that figure though, you should probably go with an independent real estate broker and not with one who is part of a large firm.
