When to lowball your broker on the commission
In Case You Missed It: Every so often, BrickUnderground digs through the archives to find the best advice our experts have shared through the years.
Brokers usually make all of their money from commissions, rather than salaries. From a typical 6 percent fee, half will go to the buyer's broker (if there is one) and anywhere from 10 to 50 percent will go to the agent's brokerage, depending on their split with the firm. (Standard is 50 percent, though top producers keep more of their earnings, and some firms work on a high-split, 90/10 model.) That said, everything is negotiable, as ex-broker Malcolm Carter wrote for us back in 2012. Here, some of his tips:
IT'S TIME TO HAGGLE IF ...
- You hire a newbie. The most successful and experienced brokers may be less flexible about their fees because they place a high value on their track record.
- You've worked with the broker before. Like frequent fliers, frequent clients save money.
- Your apartment is on the high end. Brokers will be more willing to negotiate if the sale price is higher than average; otherwise, it's not worth their time.
SKIP THE BARGAINING IF ...
- Your apartment is a tough sell. High monthlies, an inconvenient location or strange layout? Your place will probably take longer to trade, so a broker will want to make the full commission.
- Other parties are taking a bigger cut. An agent who's reluctant to lower the commission may not be greedy. It's possible their brokerage is taking a large slice of their fee, or that they don't want to scare off buyer's brokers hesitant to work for lower pay.
For more, read "A real estate broker reveals the best way to negotiate a commission"
Related:
7 reasons a broker will refuse to sell your apartment
Confessions of a first-time seller
Do you know the right questions to ask a broker?
Top negotiating mistakes EVERYBODY makes (sellers, buyers and their brokers)
