Fee Paid to Agent is Negotiable Item
Fee Paid to Agent is Negotiable Item --- by Linda Goodspeed for the Patriot Ledger, July 13th, 2012Â
Question:Â I am trying to sell my condo for $55,000, but the two real estate agentsÂ I have spoken to so farÂ about the listing both want to charge me a flat fee instead of the normal commission.Â The fee is higher than the 6% commission I was expecting.Â Can they do this?
Answer:Â Yes, they can charge a flat fee, and in fact, on lower-priced listings, there seems to be a growingÂ trend among real estate agents to do just that:Â charge a flat fee rather than the percentage-based commission.
When you contract with a real estate agent to sell your home, you negotiate a contract, including such items as the length of time of the listing, services the agent will provide and how the agent will be compensated.
Regarding compensation, the industry standard is for agents to charge a commission based on 6% of the home's sales price.Â But this percentage is negotiable.Â When I sold my condo a few years ago, my agentÂ and I negotiated a 5% commission.
But when a home or condo is valued, like yours, atÂ $55,000, some real estate agents may feel that the 6% commission is not enough compensation to justify their time and energy and expense of marketing the home, especially if they have to split the commission with another agent involved in the deal.Â So some agents have come up with a flat fee compensation arrangement on lower priced listings.
A flat fee, even though it may be higher than the 6% standard commission you were expecting, could actually turn out to be in your favor.
People tend to work harder if they feel they are being fairly compensated.
But, in any event, the key thing to remember is that the fee you pay an agent to market and sell your home is negotiable.Â You need to weigh the pros and cons of a flat fee versus a commission.Â If you don't like what one agent is demanding, speak to another agent.Â See if you can come to a compromise that suits you both.
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