Everyone wants to save money on their listing commissions. But they go about it the wrong way. It’s best to negotiate the listing commissions from a position of strength. Here are 5 tips to help you reduce your listing commissions:
- Don’t ask for a reduction. Just asking an agent to reduce their commission is working from a position of weakness. First of all you can always find an agent willing to list it for whatever commission you want. But you will get what you pay for. The idea isn’t to find the cheapest agent but to see if you can negotiate a commission reduction with the best agent.
- Leverage multiple transactions in negotiations. If you’re buying and selling a home you can leverage the increased volume and ask for a reduction. Especially if you are buying something more expensive. It makes more sense for the agent to discount their listing commission if they are also working with you to buy a new home. For the agent it’s about the math and how all of your business add up.
- Leverage referrals. Referrals to an agent are a great way to leverage the possibility of a discount, in addition to multiple transactions. As a business decision the agent can balance your discount against the repeat business or the new business you’re bringing them.
- Stay win-win with your approach. If the agent doesn’t have to work with another agent/co-op on your listing they would keep the entire commission (They are the only agent involved and the buyer isn’t represented by their own buyer’s agent). Ask the agent to cut you a break because of the increased volume by not working with another buyer’s agent. I would suggest asking for a 1% to 2% discount. The listing agent will still net more than a typical transaction with another agent so it’s a win-win.
- High-end homes could be an easier discount. If you have a high-end home, it may make sense to ask the agent to discount. Listing a $1m home isn’t always more expensive or more work for the agent versus a $300,000 home. But the commission is $60,000 versus $18,000 (at standard 6% rates). Maybe for the higher volume they may be willing to offer you a discount.