As a Realtor, I have always maintained my fee and never settled for less. Yes, there are somethings that are negiotiable but a Realtors fee shound not be one of them. Realtors/agents who offer different fees set themselves up for failure. What do you do if Seller A, who you listed their house at 7% should meet Seller B, who you listed their house at 5%? I have seen this happen with other agents. Gues what? You'll get the type of advertising you don't want (i.e. bad mouthing). A word of caution, those agents who "cave in" to a lower rate are NOT strong negiotiators. Do you want someone like that in your corner when an offer comes in on your house?

Lots of excellent advice here. Yes, everything's negotiable and you can ask....absolutely. But in today's market, an agent has to work harder and, in my personal opinion, no it's not reasonable to ask people to work harder for less money. As Mansur notes, if you do negotiate a lower commission, make sure that it's coming out of the listing agent's pocket, not the buyer's agent's. If your agent is willing to take 2%, and give the buyer's agent (and broker) the higher 3%, fine. But if you start slicing into the other agent's fee, you'll get far less activity on your property.

One point that hasn't been made here: Put some of that money (from a reduced listing fee) back into the equation as a bonus to the selling agent. If, for instance, your house sells for $400,000 and you've negotiated a 5% commission rather than 6%, you've lowered your commission by $4,000. Put $2,000 of that back in as a bonus to the buyer's agent. You'll still have saved some, and you'll have made your listing more attractive on the MLS. And, who knows, if your own agent also sells your house, he/she will collect on both ends, plus collect the bonus.

But, bottom line, you've got to pay someone--whether it's a Realtor, a gardener, a mechanic, or an accountant--a fair price for the work they're doing. And the harder the work, I'd suggest, the more they're entitled to.

Hope that helps.

Hi Susan:

Since this question is likely to be asked by many sellers, I will take a moment to explain how sellers should be thinking about commissions.

1) Your listing agent will be representing you and packaging your home for sale as a product. The skills of the agent and the quality of packaging will have a value impact on your property. Your marketing costs of the product are included in your sales price -- hence the consumer (buyer) pays for it. Do not ever be willing to sacrifice on the quality of your listing agent. Lower quality representation will reduce the value of your home. A big sign in your yard that reads "Our Fee is x%" does nothing to promote your property and detracts from the value of your house. Have you ever seen expensive and high quality perfume being sold in a cheap looking bottle? Even though the bottle does nothing to enhance the fragrance, without it no one would pay the price.

2. Your financially strongest and highly motivated buyers will be represented by buyer agents. While your listing agent has the complete right to determine his/her pay structure, that agent does not determine the buyer agent's pay structure. You need to have a good understanding of how much your listing agent will be paying buyer agents and what will be the market impact of the proposed fee sharing structure. The less your listing agent pays buyer agents, the less will be your market exposure. When you cut out buyer agents, you are now left with only one person (your listing agent) trying to sell the house as opposed to the entire market of agents working in your area. Since your market exposure is less, now your price has to be lower for your listing agent to have a decent chance of finding the buyer. Your goal as a seller should be to hire 10,000 agents -- not one.

Ginger brings up a great point. In this market it does cost more to market a home. Everything is negotiable, just remember what you are asking for. How does it work for you and how does it work for your agent. Good Luck

Plenty of agents will take your listing for 5%. Some of them are even good agents! Given the state of technology, it can be much cheaper to market properties if you are reasonable. All my properties get a website, a blog, an 800# with caller ID capture, a virtual tour, advertising on a zillion websites, and on and on. However, if you want me to pay to print pretty brochures (which don't sell houses) and drive to your house to keep them stocked, and advertise in the paper, then it will cost accordingly!

Remember- commissions are negotiable!

You can look at 6% for the first $100K, and 5% over $100K for the commission structure. Just remember, you get what you pay for many times...the agent may only make 1/2 of the commission as a max, with the rest going to the broker...so you may get less advertising of that property...so the theory of "less to the agent, more time to take to sell" may come into play.

No. In a fast moving market, where real estate sells quickly, 5% is reasonable. In this slow market, agents must spend a lot more money on advertising and a lot more time showing the property. I would spend the 6% but I would stipulate in the listing agreement that a full 3% goes to the buyer broker. your home will sell faster.

It is reasonable to ask an agent anything. Commissions are always negotiable. That being said in today's market we have an increased amount of inventory, work and expense to get a property sold I cannot see why one would want to cut the commission. It takes experience, expertise and expense to get property sold. We are seeing some sellers offering higher commissions to get their property sold.

I am answering without reading the other 12 annswers you have gotten, as I am at a Seminar in Phoenix!
In todays market, it is very hard to sell, there is a lot of competition out there for your property, and the media is doing their level best to make sure no one buys now - although Donald Trump says this is the time to buy - you should increase the commission, not cut it - an agent has lots of properties available to show and the one who offers the most comission will get the majority of the showings - just like if you lost your job and had two offers, one at one price, and one at 20% more (same as 2.5-3%) which job would you take?
Bill Wootan - Leader of Team One
@ Century 21 H T Brown

Commission rates are always negotiable, so shop around. You'll likely find that the higher commission Realtors will offer service that eclipses the discount brokers. You decide what suits your needs.

In addition, since the goal is to sell - not keep - your home, you need to be sure that the Realtor you are considering will work diligently to help you determine a realistic asking price based on your home's location and condition. Price, location and condition, not commission, determine whether a home will sell (or not). Be cautious with Realtor's who propose the highest list price -- they may be "buying" the listing and not looking out, necessarily, for your interest.

Finally, be sure to ask to be shown a full market absorption rate analysis for your area. That will reveal how quickly other home's in your area and in your price range are selling, as well as how much current inventory you'll be competing against. This analysis can be a real eye-opener and is very useful when determining your initial list price.

Hi Susan,

If the services and end result were exactly the same whether you paid 5% or 6%, it would only stand to reason that you would want to pay 5%. But, not all Realtors are equal.

The question really becomes a matter of hiring the person whom you believe will deliver you the best results.

You may find a Realtors who will negotiate their proposed fees, while others will not. You can ask anyone. Hire based upon your belief in the person who will bring results. Hiring a Realtor is hiring a temporary consultant. A corporation will pay a higher salary to attract better talent. The corporations and business exist to show a profit. When the decision is made to pay a higher salary, it is an investment that is anticipated to bring about a greater return. Likewise, when hiring a Realtor.

Hey guys, there are some good answers here, there was a TD and no TU when I got back on to check the answers. Don't get so caught up in your response that you forget to let others know you agree with them or that they made a good response.

Susan
This is a question I see often.
Which is more important, the amount of money you receive at the close of escrow, or the percentage of commission? Be sure you understand the difference.
One of the skills that you pay for in a Realtor is the ability to help you prepare your home for market so it will offer the most value.
Another skills is to expose the property in the most effective manner
The third skill is to negotiate the best price and terms

If a Realtor is good at these three skills, you will more than pay for their services. Ask your Realtors how they perform each of these skills, to prove to your satisfaction that they can do the job for you.

Then negotiate the commission. Just remember, you get what you pay for.

I'm getting all of my sellers to INCREASE their commissions. With a slower market and increased inventories, you want to do whatever possible to increase showings on your home. Higher commissions and/or a bonus to the selling broker will both help accomplish that. I'm having to work harder, spend more time on each listing and spend more money on marketing because the market is slower. I'd turn down a listing if the seller wouldn't agree to a reasonable commission. Sure, you can find someone who will take your listing for less money, but do you really want a "discount" agent in this market??? The old adage 'you get what you pay for' rings true.

Why do you feel an agent should be paid less in a market where the job is harder?

Susan,
The way the market is right now, your agent will likely have more out of pocket expenses as the home will take longer to sell. Commission is always negotiable. Keep in mind you get what you pay for in a lot of cases. If you want a discounted rate, you may get discounted service. In todays market that could be a huge mistake. Interview several agents, get detailed information about their marketing strategies, and their commission. Then choose the agent you fill will be the best fit for your needs.

Susan, I heard this line over and over again when the market was going up, up, and away and now that it is "retreating" (the approved NAR word!) we hear it again. I feel, especially in THIS market, having a Realtor who has gone through this before is invaluable, not necessarily "price-less" but pretty darn close. With inventories hitting historic high levels you need to get noticed. The longer you take to sell your home, the longer you allow more REO's to dominate the landscape(Real-Estate Bank Owned Property) and to slash and burn on prices further lowering comparables sales; the longer you allow "Short-Sales" to further erode equity, and as neighborhoods become dotted with for sale signs and more great news get's heard everyday of Billions more in write-offs of bad loans, corrupt appraisers, and credit tightening, the longer you are ON the market the more HIT you're going to take to your homes equity.
I would offer 4% to the Selling agent give your agent 3% and then offer a "Buyer's Incentive" program to attract buyers NOW! That being said, all real estate is local and the local input of a long-term Realtor is advised. I relinquish to their local knowledge. The preceding is the opinion of Mike Kelly and not that of Keller Williams or Trulia Voices or anyone else for that matter!! No collusion here!

Susan,
In today’s market commission rates are trending higher because of the additional time and money spent marketing a home. It always a good idea to interview two or three agents and compare marketing plans and fees. Go with the agent who can get you the most money for your home in the shortest amount of time not the cheapest agent. In my area the best agents can justify their fees and recoup more then the additional one percent for their sellers.
Michael

Commission is always negotiable so yes you can always ask. In today's market the selling agent will need to have the ability to properly market your property though and this may reduce the amount of marketing that the agent would be able to do.

A Realtors fees are always negotiable; there is no standard "fee" across the industry. Remember that the commission rate is normally split in half; half goes to the listing agent and half goes to the buying agent. Rates are going to be negotiable based on the particular company's policy as well or the particular agent.

You want to make sure that you are not going to be losing out on any valuable marketing that your agent may need to pay for. Remember, your agent will be paying in advance for everything and will not be reimbursed until settlement. In this market homes are staying available for much longer so the time and expense that a good agent will spend on your house has increased. A good agent will be advertising in more areas, spending more time working on getting people into your house to see it.

The amount that you offer to the buyers agent could be extra incentive for them to include your house on their showing list. In many cases in todays market you'll see sellers asking to pay a higher commission to offer a bonus or higher percentage to the agent for the buyer. Ultimately the buyer is the one that will buy your house, but if there is an added incentive, it may encourage the buyer's agent to bring their client by which will increase the possibility of your getting a sale. Ask a lot of questions to your Realtor and have them tell you what they are going to do as far as marketing your house and what they suggest as a co-op commission offer as well as what their commission fee is for their part of the sales process. Good luck to you!