Real Estate commissions can be high and add quite a bit to the actual sales price of a home and as a Realtor myself I think we provide a tremendous service 87% of the time. Real Estate commissions can vary from each deal and can get as high as 7% of the total sales price at closing but this doesn’t mean its the only way to get things done. There are a few tricks homeowners can use to their advantage to reduce commissions and still get the same level of service they are expecting. There are also some great programs for sellers that want to be more involved. Shall we discuss?
- Sell/Buy – Commit to a broker by using them in the sale of their home and signing a buyers agreement to use them to buy a home. Many agents will give a reduced commission on the sale if they know they are definitely going to be the buying agent on the next home. The contract just says you are going to honor the arraignment for both deals. I think this is one of the best ways to gain a little money back as a 2 deal party.
- Limited Services – I am a big fan of this especially in a time when so many work from home or have flexible schedules to manage a listing. By hiring an agent that offers limited services, you can cherry pick what exactly you need from a listing agent. Need to just be on the MLS or someone to just handle the paperwork? By taking on some of the task associated with selling your home, you can greatly reduce how much time and effort a listing agent typically puts into a sale. Meet with your favorite agent and put together a clear list of expectations and negotiate what the cost of that may be.
- FSBO – While I am not a huge fan of FSBO all together I do see its value in the marketplace and completely understand how its doable by many sellers. Selling a house yourself can be done but be sure to really evaluate the market for your home specifically. This is no time to “roll the dice” or think because you are available that you can sell your home. If you happen to live in a highly desired neighborhood with lots of traffic, this may be a fantastic option to save a lot of money. If you live off the beaten path or turn over is a bit slow in your neighborhood, you may want to reconsider this option.
- Ask – You know the line “It never hurts to ask”? Well that is true when meeting with your potential listing agent. We all know that this is a competitive market and we are all fighting for a limited number of listings. Ask your agent if they would consider a reduced rate before you shop them around. Don’t be surprised if you offend them and many agents have very strict policies about their time vs value, which is fantastic. But just like every other product and service a better price may out way the relationship when we are talking about thousands of dollars.
- Trade – Many Realtors especially when they are starting out have a long list of needs like websites, logos, apparel and marketing materials they are going to spend lots of money on. Get creative if you own a company that can offer something of value to an agent. For instance a small restaurant could trade food to host Open Houses or client parties, a sign company can trade signage for lowered fees and I had a auto dealership client offer me a car in exchange to list a property and sell it. Depending on what you can provide and what an agent is needing at that time there may be a nice exchange opportunity to lower your real estate commissions.
Again I love high commissions and making great money selling property but its not only hard to swallow but a big chunk of a transaction when selling a home. Get creative and keep in mind that agents need to make a living but most of us are not overly greedy or unreasonable to do some business. Like I said 87% of the services Realtors offer are amazing but knowing what you need and where they add value can save you thousands of dollars in a sale. Good luck!
Curt has been in the Indianapolis Real Estate business for over 10 years and spent his first years learning all aspects of commercial management and brokerage. He has had great success in managing existing commercial projects and new retail and office developments. Curt specializes in building owner representation and purchases in the Westfield Indiana market as well throughout the Indianapolis Metro area. Curt is passionate about growing the local Westfield community and in his free time volunteers with Westfield Youth Assistance and raising 2 children with his wife Jennifer.