Speak up, home sellers - Those who haggle on commissions often get what they want: report:
By Amy Hoak, MarketWatch
Last update: 6:03 p.m. EDT Aug. 4, 2008
--- CHICAGO (MarketWatch) -- Don't be afraid to ask your real estate agent for a lower commission -- chances are, your wish will be granted without affecting the quality of service, according to a new survey by Consumer Reports.
Forty-six percent of the sellers surveyed by Consumer Reports for its September issue said they attempted to negotiate a lower commission rate, and 71% succeeded in getting one.
Plus, those who paid commission rates of 3% or lower were as satisfied with the performance of their broker as those who paid 6% or more, according to the survey results.
--- Because people are so successful, said Amanda Walker, senior project editor for Consumer Reports, "then clearly it should be something that you should try to do." That's especially true in today's challenging markets when sellers may need to cut their price, she added.
The results were based on a survey of 3,753 readers who sold or tried to sell a home, 4,029 readers who bought one and 7,368 readers who did both during the past few years.
--- In fact, people who paid higher rates were more likely to have regrets about the selling process, the survey found. Almost one-third of respondents said they should have been more assertive in negotiating the agent's commission.
That's not surprising, because haggling simply makes many Americans uncomfortable, said Steve Murray, editor of Real Trends, a real estate industry trends and research company.
"Americans are not born hagglers," Murray said. However, negotiating real estate commissions is much more commonplace that it was even 10 years ago, he added.
Still, in today's challenging real estate markets, the average commission rate is rising, he said. According to Real Trends' analysis, the average commission rate today is 5.2%, up from 5.02% in 2005. The rate was 6.1% in 1991, and had declined every year until 2006.
The rise in rates lately is logical, since homes are taking longer to sell and real estate agents need to spend more money and time selling a home, he said.
"When the cost and the time that it takes to market a home goes up, why would anyone expect that those providing that service would charge less?" Murray added.
--- That said, there's nothing wrong with asking for a lower rate, he said. And don't assume that an agent won't budge -- the Consumer Reports survey suggests they will, Walker said.
Broaching the topic
-- If the seller doesn't bring up the topic of negotiating commission, a real estate agent might do it for him or her, according to the National Association of Realtors.
In an NAR survey of sellers last year, 39% said that their agent brought up the topic and 31% said that they brought it up themselves -- and the agent was willing to negotiate, said Paul Bishop, managing director of research for the industry group.
Nine percent of sellers said they knew that the rate was negotiable, but didn't bring up the topic, he said. But 13% of sellers didn't know commissions and fees were negotiable.
The Consumer Reports survey also found:
* 71% of sellers were "very" or "completely" satisfied with their broker, while 12% said they were dissatisfied.
* 66% of those who used an agent to buy a home paid an average $5,000 less than the listing price. The 34% of buyers who didn't use an agent paid close to the asking price.
* 86% of those who put their homes on the market made a sale, while 8% eventually gave up and took their homes off the market.
--- The Consumer Reports survey also found that 82% of those who sold a home with the help of an agent received an average of $5,000 less than their original asking price, but nearly all of the 17% who sold their homes without an agent received about what they originally asked.
Many sellers who act without an agent may get what they ask for because the price is settled on with friends or family from the beginning, he said.