Negotiating Real Estate Commissions

As Denver’s real estate market changes and home prices drop, sellers might consider negotiating commissions to maximize their profits. Before hiring a real estate agent, getting two or three quotes to find out precisely what services agents offer is crucial. In this industry, you very much get what you pay for, and with at least two estimates, you can use the proposals as a litmus test to judge your potential agent’s abilities.

Sellers typically shoulder the cost of commissions for both their agent and the buyer’s agent since those fees come out of the closing price. But because most sellers factor this sum into the asking price, buyers also help pay that cost.

With rates ranging from 5 to 6%, sellers may consider negotiating commission rates. Buyers can do this also but aren’t as likely to. Realtors may be more willing to consider reducing their commission rate if the property is new, requires minimal preparation, or is in a high-demand area, however there are no guarantees.

Flat-fee brokers

Flat-fee real estate agents and brokers set their services’ prices at the start, so the final sale price doesn’t increase what you pay.

But that cheaper commission may pose some risks, including:

• Less attention: Flat-fee brokers may need to close more deals than traditional agents to make the same amount of money. That may limit the amount of time devoted to you and your property.

• Potential conflicts: Because flat-fee brokers typically represent more clients, they may also represent both buyer and seller in the same transaction, which can create conflicts of interest.

• Lower profit: Flat-fee brokers may be less experienced, and that lack of expertise could cost you in final negotiations.

The flat-fee model works for some people, but selling real estate is more complex than putting up a sign and putting the home on the MLS.

When selecting an agent, sellers ultimately need to work with someone they trust and whose guidance they’re willing to follow. If you’re considering selling, we’d love to discuss your options. Reach out to one of the experienced pros at Metrowest today!