Negotiating Commission

wonka27November 25, 2008

What are your thoughts on negotiating a commission.

We are probably going to use an agent from the same office of the agent that handles sales at the development we are buying from. So both the buy and sell end would stay "in the family." Because of this, I'd like to negotiate commission. I know it is not the same person, but I feel they can all figure something out that is equitable, or we just won't use the sellers agent and just find someone else to sell our home.

Is my thinking correct here. I was going to look for a 4.5% (1.5% to our agent, 3% to buyers agent) for the sale of our home. Then the two agents could determine if the agent from the development should "subsidize" our sellers agent.

Am I nuts or is it doable? I figure they stand to make about $6K from the sell end(with a cut going to their bosses, of course). I don't know if new construction pays the same commission on the buy end, so can't estimate there.

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My 1st concern is whether they know your market and are local. If they are not local I wouldn't do it.

    Bookmark   November 25, 2008 at 5:41PM
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Wonka, all commissions are negotiable, only the agent you choose can decide if they are willing to do the work for what you are offering. I am assuming your house is worth $400k (1.5% = 6000K which is what you said they would be making) Just say your agent is on a 50/50 split with her broker. Off the bat, she is making $3000. From there, you have to take a franchise fee out, (some places its 8.5%, plus their E&0 insurance, taxes, etc. So lets be generous, and say the agent will make $2000. Now, if the listing is on the market for an average of 8 months and you are advertized just one time a month at a cost of $200,(most sellers want more than that) being conservative, plus the cost of open houses, brokers open, (those usually run me about $200) you are paying your agent $200 to sell your house. Is it doable? I don't think so.

    Bookmark   November 25, 2008 at 5:56PM
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Why not use the same agent for selling and buying? Under those circumstances every agent I know would give you a break.
With the scenario as described, I don't see how that would work, even with both agents being in the same company. They both are independent contractors and would have to come to a mutual (written?) agreement. What happens if you fire one of them?

    Bookmark   November 25, 2008 at 7:02PM
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While I'm all for saving money, you can shoot yourself in the foot by cutting an agent's commission. If you use one for both sides, yes, they might take half a percentage off, but otherwise, they have little incentive to work hard for you. That's the reality of the game. Can't rely on agents working it out amongst themselves -- it has to be clear and agreed upon from you.

    Bookmark   December 1, 2008 at 2:54PM
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