Wednesday, August 13, 2008

Sellers Corner Commission Concessions

Guess what? The money you can save on a discounted commission, all too common these days, could very well be enough to make your listing sell with something left over for you. Here's how to cash in.

by Broderick Perkins
© 2008 DeadlineNews.Com

Unauthorized use of this story is a copyright violation -- a federal crime

Deadline Newsroom - Pretty much like everybody else in the soft economy, real estate agents are taking a pay cut and that's giving sellers some bargaining power.

A recent Consumer Reports survey of more than 9,000 home owners, found that among 46 percent of those who, from 2004 to 2007 sold or attempted to sell their home and attempted to negotiate the commission, 71 percent succeeded, often netting a 3 to 4 per percent sales commission for the effort.

The deals didn't come from discount brokers or reduced service outfits, but traditional brokers including Century 21, Coldwell Banker, Prudential, Keller Williams, RE/MAX and other companies, as well as independent company agents. RE/MAX agents were most likely to lower commissions, followed by independent agents, but none of the companies were far behind the leaders.

Apparently everybody's doing it.

Just as buyers are strapped for cash and credit, sellers' real estate agents are likewise willing to find some financial middle ground and, when it comes to the 6 percent commission, that's about a 3 percent commission.

This price break is no raw deal. Home sellers who netted a commission discount also enjoyed the same kind of satisfaction enjoyed by those paying full price, Consumer Reports said.

Service satisfaction scores that home sellers gave all the companies revealed "no statistically meaningful difference among the rated companies" the study found. Among one of the "most surprising" findings, the lower commission "rarely had any effect on the sales price," Consumer Reports found.

So, go ahead. Dicker. Quibble. Haggle.

The majority, 54 percent of sellers not seeking a discount are missing out on fat extra cash that could help with move-up costs, foot the bill for concessions to lure buyers off the fence or finance a vacation around the world.

On a $250,000 home, a 6 percent commission amounts to $15,000. At three percent, that's only $7,5000. The extra $7,500 is a lot more economic stimulus than the federal government provided earlier this year in tax rebates. On a $500,000 home, a price not uncommon in high-cost housing areas, you are talking a sweet $15,000 savings -- or five $3,000 a month mortgage payments!

And here's the deal. Because real estate listing marketing services appear to be uniform across all real estate companies, according to the study's consumer satisfaction scores, you can take your sweet time ferreting out a top-notch real estate agent. Concentrate not on which company to choose, but on referrals to specific agents from family, friends, co-workers and others you trust who've recently enjoyed satisfactory service.

To make the reduced commission deal fly fastest and highest?

• Negotiate from a position of power. Let your agent set the price. If you've been professional about choosing a professional, he or she will be dead on with the price. Agents are more apt to give you a discount if you follow their lead.

• Roll up your sleeves. Pitch in as you would with a discount broker in a hot market. Host your own open house, for example and give the agent some time off. Just refer unanswered questions, bids and tough questions to the agent. Likewise, if you are selling to a family member, friend or renter and don't need the agent's marketing expertise, a discount is typically a no-brainer.

• Sell in the off season. Winter in the Northeast. Pre-back-to-school doldrums in the West. Put your home up for sale when fewer sellers are making the move and you'll get your agent's attention in terms of lowering the commission.

• Get your house in order. Consider spending some of that commission break on a professional stager and make it easy on your real estate agent who will have to work harder on a distressed, disorderly short sale, auction or foreclosure property. Curb appeal gets shoppers inside. A spiffed up interior keeps them there.

• Go to the top. Get your discount from the broker, rather than his or her real estate agent. The broker is the boss. He or she has the power to pull strings, negotiate his or her cut with the agent and get you want you want and the agent a viable listing.

© 2008 DeadlineNews.Com

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Broderick Perkins, an award-winning consumer journalist of 30 years, is publisher and executive editor of San Jose, CA-based DeadlineNews Group -- DeadlineNews.Com, a real estate news and consulting service and Web site and the new Deadline Newsroom, DeadlineNews.Com's news back shop. In both cases, it's where all the news really hits home.

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