Generally speaking, real estate agent commissions are negotiable. Some agents are ready to reduce the fee almost instantly, while others are open to some form of discussion. However, it is good to note that not all agents will negotiate a commission with you—they don’t have to.
How Real Estate Agents Get Paid
There are a handful of ways that real estate agents get paid. Depending on company policies and agent production, commission rates vary among brokers. How much an agent is paid depends on his or her performance, too. An agent who closes a hundred transactions a year, for instance, will always get paid more than one who closes a couple of deals every few months.
Only licensed agents can receive a commission. Agents that are employed under brokers are paid as independent contractors, and any commissions made by the seller are divided fifty-fifty. Although half is supposed to go to the seller while the other half goes to the lister, this isn’t always the case.
It’s also important to note that there is an ongoing trend of listing agents getting paid more than agents representing buyers.
Why Commission Differ Among Agents
In reality, most agents charge different commissions. The reason behind the difference is that agents range in skill, experience, contacts, and more.
When choosing an agent, keep in mind that one may not offer the same services to another—the cheaper the agent, the less they will provide and having a partner or team can make a difference.
In other words, you get what you pay for, and agents are paid what they are worth.
Selling and Buying with the Same Agent
It is perfectly acceptable to ask your agent to discount the commission while also requesting that he or she represents you when purchasing a property. However, the agent is free to agree or disagree.
In theory, if your agent becomes your listing agent, they’ll receive the commission on the listing side. When the agents represent you when purchasing a home, they’ll receive a commission on the transaction side. On paper, it sounds like a great deal—two transactions one person. Unfortunately, the real world begs to differ.
With two different jobs but on a discounted commission, your agent may feel like they’re doing double the work for less than double the money. On the selling side, it can get even tougher as your agent does not have control over another agent’s fees.
To persuade your agent, consider offering them incentives such as referrals to bring more business and, as a result, more money for the agent.
Agents who work in specific places or neighborhoods usually offer discounts from time to time. It is also these agents that will ask for a higher commission, although they will agree to lower the fee if competition from another agent exists. For example, let’s say that you like the first agent you’ve met, but their quote is much higher than the second agent you’ve interviewed. You’ll have to call back the first agent, tell him or her about the second agent’s fee, and explain why.
By doing so, you’re giving the first agent a reason to lower the commission by a certain amount and ask the right questions.
Despite how hard you work to negotiate with a real estate agent, remember this: you get what you pay for. Don’t get so hung up with trying to reduce the fees that you lose out on hiring the best agent you could have possibly have and be cautious when trying to buy a home without an agent.
Talk to our team now if you are looking to buy real estate in Surrey, get in touch with us today! We’re happy to help.