How to Negotiate with a Realtor’s Commission: 8 Steps

Despite the fact that the real estate market is always fluctuating and evolving, that stubborn 6 percent commission rate seems to be immune to change. Although it varies slightly based on location, many have been told this is the non-negotiable reality for sellers who use a traditional real estate agent.

However, this is not necessarily the whole story. While you don’t have much control over about half of that commission due to the fact that sellers will likely have to pay a buyer’s agent about 2-3% no matter what, it is still possible to negotiate rates with listing agents to boost your margins on the sale. You will require some tact in order to negotiate successfully, but it can be still be worth a try.

If you want to make sure negotiation works out in your favour, here are eight steps on how to negotiate with a realtor’s commission:

1. Know your rights

First things first, it is important to understand the laws governing commissions and to know what your rights are. No matter what anyone tells you, know that commissions are always negotiable. Nothing is set in stone and you’re certainly within your rights to discuss alternatives. In fact, in some cases regulatory bodies even offer rebates and commission reductions to promote healthy competition between real estate agents.

2. Success and negotiation go hand in hand

It is also worth keeping in mind that a successful agent will be willing to negotiate. Think about it this way- a successful agent will have more room to negotiate due to the volume of their business. Rather than a sign of weakness, a willing to reduce their commission indicates that they have an abundance of business.

3. Know the baseline in your area

As mentioned above, commission rates can vary slightly due to locality. It is definitely advisable to ask around and find of what the experience of others who have gone through the process has been. If you don’t know many people in the area or don’t feel comfortable bringing up a sensitive topic like money, then try visiting an online forum or community and ask the general population.

Being able to demonstrate that you’ve done your homework will leave you in a much better position when it comes time to sit down to the negotiating table.

4. Don’t let your emotions get the best of you

When you negotiate with a realtor, it can be easy to be overwhelmed when it comes to discussing your home and its value. More than just a mere “thing” you purchased, this is a fundamental part of you and your family’s life. Nevertheless, when it comes to negotiating, it is important to check your emotions at the door and go in with a clear head. Being overly emotional will only give the agent more reason to dismiss your appeal.

5. Remember that you won’t get what you don’t ask for

Asking can be uncomfortable, but it is the only way to get what you want. Have a clear idea of what you want going in and be direct. Ask for the commission reduction you want and state your reasoning for requesting it. Know the ins and outs of the situation. For example, if the agent is representing both sides, you know that they have a lot more commission to split. Be informed and speak plainly. Showing hesitation or reluctance will not do you any favours.

6. Keep a fair and balanced perspective

Remember that for any successful negotiation, you have to be able to appreciate the situation from both sides. Don’t get carried away and be honest in asking yourself whether the amount of commission they are getting is “fair” for the amount of work being done. If they perceive you as being greedy, you won’t be left with any room to backtrack. At the same time, if you’re paying for staging and helping to show the home, you definitely have some leverage to request a discount.

7. Take it slow and play a little hard to get

Successful negotiations tend to take a little bit of time to come to fruition. It is important to give the deal time to happen and not to rush into something simply because you’re eager to have it settled. Don’t forget that from the agent’s point of view, the longer it takes you to sign a listing, the more time other realtors have to solicit you.

There’s nothing wrong with letting them have a little bit of time and space to wonder what you’re thinking about. In fact, you might be well advised to avoid picking up the phone every single time they call.

8. Stay positive

Keeping a positive attitude and an optimist outlook will also serve you well. You need to demonstrate confidence and conviction in the proposal you’re making. Positive energy is contagious, and if you’re radiating good vibes other people will notice and want to work with you.

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