Negotiating Down The Real Estate Agent’s Commission

You know, we’ve always talked about the six percent that real estate agents charge their clients in Houston Texas, but we’ve realized we’ve never told you that it’s possible to reduce that figure. For the record, “possible” does not in any way, shape, or form, mean easy. It’s somewhat difficult, but with the right negotiation strategies, we believe you can hack it. 

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Also, we feel the need to reiterate that real estate agents aren’t our adversaries. We’ve noted that a lot of our clients are always hesitant to talk about their realtors, because they think cash buyers and agents don’t see eye to eye.

Well, they are wrong. We don’t have any problem with how agents operate, or the fee that they charge their clients. The reason why we always encourage sellers and buyers to work directly with cash buyers is because we want people to save more of their time and money. There’s no need of wasting resources, when clearly, you could save them.

How Do Real Estate Agents Make Money?

First off, you’ll notice that we sometimes call then agents, and other times realtors. That doesn’t mean that they are different people. The only difference is, agents aren’t licensed by the National Realtors Association, while realtors are.

In addition, that doesn’t mean that realtors are more experienced than agents. We actually do have agents who’ve been around the block for a very, very long time.

Moving on, realtors or agents usually make money through commissions. But that six percent commission is normally split into four. The buyer’s agent will get a share, the seller’s agent, and both brokers.

How much they all get will depend on the terms of the agreement. It could be 70/30, 60/40, or even 50/50. So if you see an agent fight to raise that commission to six percent, it because they know they’ll only be able to earn more if the price goes up.

What’s The Appropriate Time To Negotiate The Commission?

You’ll be pleased to learn that it’s within your rights to negotiate down the commission. And if you’re working with an attorney, they’ll acquaint you with the federal antitrust law, which usually prohibits different parties from conspiring to eliminate competition.

If you ever find out that your agent and the buyer’s agent are conspiring to dupe you, collect enough evidence and then sue them both. They’ll be charged for price fixing.

The best time to negotiate a lower commission is the time you feel like you have enough leverage. Let’s say for example, the property market has dried up, but the demand is still high. The agent will know buyers willing be willing to pay crazy money for a house even if it’s a rundown property. Take advantage of that, and indirectly let the agent know you’re willing to go at it solo should he or she demand a larger commission.

If they are willing to work with a lower commission, go ahead and ask them to find you a buyer. But if they aren’t, call We Buy Fast Houston Houses and ask for an offer.

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