Real estate commissions are how REALTORS® and real estate agents are compensated for selling your home. Commissions are usually divided into two halves, one for the listing company, and one for the selling company that brings the buyer to the transaction. The commission offered by the seller is listed as part of the listing on the Multiple Listing Service (MLS).
While many people believe that the commission is a set industry standard, this is actually not the case. In 1950, the US Supreme Court ruled that industries requiring a certain rate illegal. A home seller can negotiate the commission offered based on a number of factors including the type of market or personal financial considerations. It may seem like it’s okay to negotiate for a lower commission price, and you as the seller have that right, but real estate services are often bundled and you need to ask yourself what service would you like to take off for a lower commission?
Here are some things that are typically done by a REALTOR® during a real estate transaction:
- Hosting Open House Events
- Research of the Market for Correct Pricing
- Negotiation Assistance
- Handling of Paperwork
- Attending all inspections
- Arranging Showings with potential buyers
- Transaction Coordination
If a seller is needing to sell more quickly it is okay to offer a tiny bit more in commission to entice real estate agents to bring out buyers. While the seller will still need to ensure the house is priced well and staged beautifully, adding a bit of a boost in commission could motivate buyer’s agents to show your property first. This could help get a few more showings and even better more offers.
Sellers need to be competitive to get the most activity and the highest price. By offering a tiny bit more in commission sellers could have multiple real estate agents bringing buyers by. That’s never a bad idea.
Have the conversation about commission up front and weigh the pros and cons. It might be worth it to come a little more out of the sale of the house to get the house sold more quickly.