For most people, it’s a joy to save some cash. A discount can save thousands of dollars when it’s on major purchases, like buying a house. So where can you easily save thousands of dollars when listing your home for sale? The answer is simple. The commission rate for your real estate agent: 6% of the property’s price is the industry standard. 3% goes to the seller’s agent and 3% to buyers’ agent.
It’s not always easy to get a rate reduction from your agent. After all, it means that your agent will take the hit and receive that much less income from selling your property. There are, however, some reasons that your agent might be willing to accept a lower pay rate. This will leave you with more money in your pockets (and more money to make the down for your next house). Here are a few reasons you may receive a discount.
Use a discount real estate broker
Not all homeowners are aware that when it comes time to list their home on the market, they could save thousands of dollars simply by hiring a discount real estate broker.
A discount broker is just like any other broker or agent with one important distinction. They charge a much smaller commission on the listing side. Change Realty, for example, will only charge a 1% listing commission. A Portland listing agent from Change Realty will still provide all the same services that other agents provide. They are able to do this because the discount agent usually processes far more transactions than the average real estate broker.
Due to the advancements in technology, particularly in the real estate industry, discount real estate agents and brokers have sprung up around the country. The fact is that the job of a real estate agent takes much less time today than years past. This is one of the main reasons why discount agents now exist.
Your agent is generous
Some agents will offer a discount on commissions when selling homes if the situation calls for it. Rober Harris, a RE/MAX real estate agent in Rapid City, SD, says that his fees are comparable to what an average agent charges. “Occasionally I feel that I spent too much on a transaction and will refund a client. Sometimes I’ll do multiple transactions with clients and charge less.
Melissa and Alex Johnson tried to sell their house in Rapid City, SD. Melissa says that Alex had just started a new job and they put their home up for sale. “At that time, Rapid City’s market was dead. It could have taken several months for the house to sell. We were lucky to be able to sell our house quickly! A young couple was interested in our house and they needed it to be closed within three weeks due to a new job. We had so many things going on that another offer wouldn’t be possible so our agent crunched the numbers and figured that he could drop his commission a little. We didn’t even ask. “He was simply amazing.”
You’re a loyal client
Andrew Miller, a real estate agent, often offers a customary discount to his clients who have been with him for a long time. Miller, an agent at Berkshire Hathaway Real Estate in Fayetteville, AR, says that it all depends on the client’s history. “I have one client that refers a lot of business to me. She has been loyal for 10 years. When her father decided to sell, I offered to do it at a discount. I earned one-third of the normal amount. This was a good business decision for me in the long-term. We’ll take good care of you if we can.”
With a justification
Agents are not always quick to offer discounts. Sarah, a seller who requested that her name not be published, was looking for commission cuts when she and her husband listed two homes (one being their primary residence, the other a rental property) for sale prior to moving into their Sacramento, CA home. Sarah says that “homes were selling quickly in our area at the time,” so we knew both properties would sell quickly. “We thought it would be worth asking our agent to reduce his commission.” He cut his commission by 1% on both the sales. This resulted in several thousand dollars savings for the couple. The first house was sold within three days. The second was already under contract in an off-market sale.
It’s never a bad idea to ask for a discount. This is the biggest lesson I have learned. There’s a good chance Sarah and her husband would likely not have received a discount on the commission had they not simply asked their real estate agent. Their agent knew that the sales would be easy because they had listed two houses with him and the market was hot.
The bottom line for real estate agent commission rates
Low inventory and a fast-moving realty market can sometimes lead to real estate agents offering to reduce their commissions to homeowners to encourage them to sell their homes. Lower commissions that can save thousands of dollars are not the industry norm. Harris says that giving discounts to existing customers, repeat customers, and referring customers is a good business strategy.