Selling a home can be expensive and every penny counts, so saving some cash in terms of fees when selling a home is important. We’ve compiled a number of tips that will show you how to do so and cut costs.
- Go For Half
The typical commission in any property sale is 6%, which is split between the buyer and the agent for a seller; however, the 3% for each party is only paid by the home seller. If you are selling your home and purchasing another with the same real estate agent, they will collect the 3% twice. To avoid facing this potential issue, it is recommended that you tell the agent you will offer a 3% total commission for the sale of the residence that the agents can split. This will allow the agent to work any deal he or she wishes when they help you purchase a home because they know they are receiving a total of 3%.
For example, when making a $300,000 sale there will be a $9,000 commission on the sale of the property; however, the realtors from each side will need to split the amount in half. Without cutting the commission in half, each agent would receive the $9,000 twice. True, the majority of the commission would go to the agency, but it’s a large fee for only a few weeks’ worth of work.
- 2. Shop Around
By interviewing at least three separate real estate agents, you will be able to identify the most suitable agent for your needs and discover the procedure they will use to sell the home. Why not take it one step further and had various companies bid for the opportunity to sell his property.
First, ask how many homes the companies had sold within this price range and in his area. Then also ask how they would market the property and the price they recommended for the property in order to sell it within a three month period. He also questioned how much residential real estate their top agent had sold.
All of the companies will be competing and while commission rate is important, the company with the lowest commission is not always the first choice. Then return to the first choice and request if they would meet the other agency’s bid, they often do.
There are also a number of companies that will allow you to sell your house for a flat rate fee. This can be a good option and can really help you sell your house by owner for less and cut costs.
- Ask What You Will Be Receiving For Your Money
Questioning the services being offered is a beneficial means of determining if what the agency is offering is worth the commission rates.
It is also recommended that you question how the agent justifies their commission rates, particular if the rate is high, and what they do that the less expensive agents do not. Why should you pay a more costly price for their services? Luxury home sales are known to be more costly because they require advertisement in publications and websites; however, does the agent really have more contacts than the cheaper agent?
- Holding Out For A Higher Selling Price
While this technique may not assist in negotiating a lower sales commission, it can be beneficial in paying for the real estate agent’s services without subtracting their free from your overall asking price. If a buyer offers to close on the asking price within the first week of advertising, the impulse is often to take the offer; however, experts at Freakonomics have pointed out that the agent has far more to gain by selling a property quickly than waiting an extra week for an offer that is $10,000 higher than the asking price.
In this popular clip from Freakoconomics’ 2010 film, the additional $10,000 will only provide the agent with $300 more in commission and half of the amount will be paid to the real estate agency. Needless to say, earning an extra $150 in commission is not a great incentive; however, as the home seller you have the right to hold out for a higher price and the additional $10,000 will be worth your time.
According to real estate brokers, there is an alternative that may be advantageous in these situations. By offering a 20% incentive for the sale of the property over the asking price, or 20% less in commission when receiving less than the asking price.
- Finding Alternatives
Companies such as ZipRealty and HelpUSell offer alternative options to the traditional real estate agents services by selling properties individually or according to a flat fee. These companies will place your home on the MLS and it is possible to sell the home privately asking a lawyer to complete the necessary paperwork.