- Try to sell it FSBO (For Sale By Owner) first & pay $0 in commissions.
- If you want MLS exposure, hire a Real Estate Agent from a Discount Brokerage who will charge you a flat fee, like $500-$1,000, to list your home.
- Ask an Agent for a discount on their commission to list your home.
- Use an Agent and pay full price.
I’ve already written about #1 and #2, so I’ll focus on #3 today.
If you are determined to use an agent from a traditional brokerage, I’d encourage you to ask them for a discount on their commission.
Remember this: The commission that you pay the brokers is negotiable!
Most people don’t know this. And there’s a reason you don’t know. Agents would like to get paid full price, which is totally understandable.
But you are an educated seller & you’re wanting to maximize your profit on your home to support your ministry. You’re glad to pay your agent a fair commission, but you’d like to negotiate it down from full price. And you should!
Let me let you in on a little secret in in the Real Estate Agent world.
Most Agents would rather represent sellers than buyers. You know why? It’s usually easier and less work. With buyers, there’s much more work involved in driving around, showing houses, making offers, and sometimes the buyer doesn’t even end up buying. With sellers, the Agent prepares the listing agreement, gets pictures taken, inputs the listing into MLS, sets up the sign & lockbox, and waits for agents to call. Nice!
For this reason, it’s totally reasonable to negotiate the commission down.
Here’s an example:
Let’s say that, in your area, 6% is the common total commission paid by sellers to the two brokerages in the transaction. Usually the seller’s brokerage gets 3% and the buyer’s brokerage gets 3%. You could ask the Agent if they’d be willing to list it for 5% total.
On a $300,000 house, that would save you $3,000 of your equity. And your agent’s brokerage would still make $6,000 (2% paid to your brokerage & 3% paid to the buyer’s brokerage).
Let’s say your house is worth $600,000. You could try to negotiate with the Agent to list it for 4%. Your agent’s brokerage would still make the same $6,000 in this case (for approximately the same amount of work as the $300,000 example above), and you’d save $12,000 of your equity (1% paid to your brokerage & 3% paid to the buyer’s brokerage).
Depending on your market, you could also negotiate it where the Agent lists it for 5% and both they & the buyer’s brokerage get 2.5% rather than your brokerage getting 2% and the buyer’s brokerage getting the full 3%.
Here’s my point: The total commission you pay as the seller is negotiable. It’s not set in stone. Agents discount their commission all the time. There’s nothing wrong with you negotiating a commission decrease so you keep more of your equity. In fact, I think it’s a good idea!
Many Agents won’t like that I’m writing this newsletter, so keep it between us - LOL! 🙂
Next time you go to sell your home, if you choose to go with Option #3 above, negotiate with your Agent to get a discount on the commission so you have more money to support your ministry!
