Monday, August 04, 2008

Consumer Reports: How to Bargain on Home Brokers' Commissions

Yes, you can get your real estate broker to accept a lower commission. That's the word from the September issue of Consumer Reports, which offers home sales tips and a survey on brokers fee.

Here's a news release they sent to me:


Many real estate brokers are willing to negotiate their commission rates with sellers who try to haggle, according to an exclusive survey from Consumer Reports September issue.

  • Forty-six percent of sellers CR surveyed attempted to negotiate a lower commission rate.
  • Roughly 71 percent succeeded.
  • The survey also found that sellers who paid commission rates 3 percent or lower were just as satisfied with their brokers’ performance as those who paid 6 percent or more, suggesting that haggling can’t hurt.
  • Respondents who paid extra, in fact, were more likely to say they had regrets about the selling process. Nearly one-third said they should have been more assertive in negotiating their agent’s fee.

Sales Tips for Home Sellers:

Price it right. Homes sell most quickly if they are put on the market at a price that’s just a bit lower than those of similar homes in the area. Don’t waste time floating a high price out there just to see if you get a nibble. If you don’t get an offer in four to six weeks, drop the price 4 to 6 percent.

Think round numbers. About 80 percent of people buying and selling homes today get information by searching online multiple-listing sites like, which is run by the National Association of Realtors. To conduct a search on that site, buyers specify a price range, beginning and ending with round numbers. So if you price your home that way, more people will see it.

• Pick the right improvements. You might want to update your kitchen or a bathroom for your own comfort, but don’t expect to recoup the project’s whole cost when you sell your home. In today’s market, you might get the best return if you spruce up the outside of your home by adding a wood deck, energy-efficient windows, or new siding. CR’s September issue has a list of the most popular home improvements and whether they pay off.

Consider the type of listing. If you’re using a broker, there are two common ways to list your home: designating it as an exclusive agency listing, which means you have one broker but can still sell it yourself and save the commission. The second, an exclusive right-to-sell listing, means only the broker you designate can offer your home during the listing term (often six to 12 months), and you can’t sell it yourself.

• Interview more than one agent. Ask around for recommendations and meet with several possible candidates. They should clearly explain how they would market your property and describe how they handle open houses and newspaper and Internet advertising. Ask whether there will be any advertising costs, transaction fees, or other incidentals that you will be expected to pay.

Broker Fees & Services

Paying less [in fees] won’t hurt the quality of [broker] service. While some of the survey respondents who paid lower commissions got fewer services from their agents, the gap wasn’t significant. For example, 81 percent who paid 3 percent or less said the agent provided a competitive market analysis of their home, compared with 87 percent of people who paid 6 percent or more.

“Finding satisfying real-estate services shouldn’t be too hard. All the major chains and independent brokers scored very well in our survey,” said Amanda Walker, senior project editor, Consumer Reports, “So if you’re looking for an agent, shop by personal recommendation or commission split.”

Other Brokerage Fee Survey Findings:

  • Eighty-two percent of respondents who sold with the help of an agent received $5,000 less, on average, than their original asking price.
  • Almost all of the 17 percent who sold their homes without an agent said they received about what they originally asked.
  • Sixty-six percent of Consumer Reports’ readers who used a real estate agent in buying a home paid an average of $5,000 less than the listing price, and the 34 percent of buyers who negotiated their own deals, without an agent, paid close to the asking price.
  • Eighty-six percent of CR’s readers who put their homes on the market made a sale; only 8 percent of would-be sellers eventually gave up and took their homes off the market. (The rest were still trying to sell when the survey was completed.)

Consumer Reports’ September issue offers a complete real estate guide with helpful advice for selecting the right broker, and tips for buyers and sellers. Here are some highlights for sellers. For more survey results, helpful tips for buyers and sellers, advice on how to buy a foreclosed home and which home improvements matter most, the Consumer Reports September issue is available on newsstands August 5 or online at"

source: Consumer Reports


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