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Your First Negotiation: the Agent's Commission
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President Danny Samson says he thinks all brokerages are under pressure to lower their commissions in communities where they compete with him. "People are using us to get their sellers' commissions down. They'll say, 'We'll go with Samson if you don't come down to what they do.' "
He sounded a bit irritated about the practice, relaying the message he gives to sellers who use his company for leverage: If that agent is getting only 4 1/2 percent from you, but his other clients are paying 6 percent, how important will your business be to that agent? "With us," he said, "we're extremely happy to have you at 4 1/2 percent."
And he stressed a key point about his company's reduced commissions: They don't cut the commission offered to other agents who bring in a buyer. They get 3 percent, the same cut they would earn on a 6 percent deal.
Another way to lower commissions is to use an Internet-based brokerage, such as Redfin.com. Sellers pay a flat fee of $4,000, $500 of which is payable when they sign the listing contract. The remainder is due at closing. Since February, Redfin's services have included professional photography for all its listings. (That's a kindness for all of us who have to look at these pictures.) But sellers have to take on some of the duties normally covered by an agent, such as hosting open houses and preparing their own fliers using Redfin's template. Sellers account for only about 20 percent of Redfin's business, spokeswoman Cynthia Pang said.
Buyers don't feel guilty negotiating over the price of homes even when they know the seller is going to take a loss. In fact, many buyers see desperation as a signal to bargain even harder. There's no reason sellers shouldn't enter businesslike negotiations with their real estate agents, either. Unless you look for the savings, you probably won't get them.
E-mail Elizabeth Razzi atrazzie@washpost.com
