Consumer-focused Innovation in Real Estate & Relocation | RE Brokerage Owner | Startup Advisor | #LinkedinLive Beta Tester | Host, ReloTalk Podcast | Speaker
”Should You Negotiate What You Pay in Real Estate Commissions?” ⭐️What would your answer be to this question?⭐️ Journalist Jon Gorey asked this when he interviewed me for the following #BostonGlobe article in 2020–long before most in the industry were aware of the 2019 lawsuits that are finally bringing major changes to the industry. In the article, he provides insight as to what the consumer NEEDS to know -- knowledge that will be even MORE CRITICAL once new changes to commissions take effect August 17. 🔔 #1: “You can try to negotiate [commissions], but you have to be mindful that it’s often not the agent’s decision" [Sonia Gilbukh, assistant professor of real estate at City University of New York]. Agents at smaller or more innovative brokerage models often only pay a flat fee per transaction which allows them the flexibility to tailor commissions based on services. However, more traditional brokerages often require agents to charge a set commission as these companies depend on a 30-50% commission split in order to remain in business. And then there are the 30-45% referral fees agents pay to Zillow, HomeLight, Dave Ramsey or #relocation companies. Consumers NEED to KNOW the questions to ask to learn what their agent is ACTUALLY paid. And with changes in August, this will be even more critical! 🔔 #2: It’s best to set terms from the outset in the buyer’s representation agreement. “You can limit it to a specific date, area, ZIP code, the homes an agent shows....There’s nothing worse than feeling stuck with an agent...so limiting the agreement to a day would give you an easy out if needed.’’ [Lindy Chapman, founder of 180 Relocation]. 🔔 #3: Sellers should interview at least three agents before listing their home. “Sellers are often shocked to receive very different listing prices, marketing strategies, and commission prices. Some agents might over-promise a high sales price to essentially 'buy' the listing while [other] agents might suggest a much lower listing price to ensure the home will sell with as little work as possible.’’ [Lindy Chapman] (We are currently helping 3 out- of-state sellers interview agents and the suggested listing price difference has been as much as 25%!) ⭐️Agree? Disagree? Would love to Connect!⭐️ #RealEstateCommissions #RelocationStrategy #ReloTalk #NotYourRealtor
Scott Fong
4mo
Although commissions have always been negotiable the current system makes it difficult for sellers to negotiate. Negotiate too much and their home doesn't get as much exposure. There are a lot of things that need to be worked out if the proposed changes (seller's and buyers pay for their own agents) but this allows both seller's and buyer's to negotiate more freely. With the current lawsuits I think most Realtors think this is bad for everyone (realtors and consumers). In the long run these changes (if they stick) will breed more trust and transparency for the industry. I know it is easier to just have the seller pay both sides but easy doesn't mean it is the best practice. On the buy side I feel flat fees should be the way Realtors charge. This way there is no conflicts of interest to show more expensive properties or negotiate the price down (and make less!). Flat fees would have the buyers best interest.
Suzy Norman
4mo
Good of you to ressurrect this important article. The Boston Globe was ahead of its time, it would seem, and so wise to interview you! Those who have moved often know that the commission is only a part of the price of selling. There’s the last-minute remodel, negotiations about repairs, staging, cleaning, and other variable costs of sale to consider. I think the biggest cost is opportunity cost, which is difficult but important to estimate.
Consumer-focused Innovation in Real Estate & Relocation | RE Brokerage Owner | Startup Advisor | #LinkedinLive Beta Tester | Host, ReloTalk Podcast | Speaker
4moLink to Article: https://www.boston.com/real-estate/spring-house-hunt/2020/05/20/should-negotiate-real-estate-commission/