Dear Egghead: I’ve been fortunate to see my house’s value increase substantially over the past few year — it’s now worth $1.3 million. If I sell — and pay a commission of 6 percent — that’s $78,000, which seems excessive to me. Should I ask for a discount on the commission?
ANSWER: You are right in the sense that selling a $1.3 million house does not require much additional marketing expenditure and expertise compared to the sale of a $500,000 house. Everything is negotiable, including commission rates. There’s no law mandating a minimum commission rate for real estate transactions.
Full-service real estate agents rarely go lower than a 5 percent commission split between the listing agent and buyer’s agent, however, they’re much more likely to budge when the home is being sold at much higher price than average.
In some cases, it takes longer for an agent to locate a suitable buyer who can afford the more expensive property. But most homes — if they are priced appropriately and do not require major repairs, sell promptly if they are priced appropriately, even expensive ones.
When it comes to “discount” real estate commissions, what often ends up being discounted is the price you receive for your home. (Full disclosure: I’m a full-service agent, and haggling over commissions is not encouraged. After all, would you continue working at your job if your boss asked you for a 25 percent discount on the paycheck you receive?”) The old maxim “You get what you pay for” is very often true.
It’s a different story when it comes to selling vacant land. Because land takes longer to sell and more marketing dollars, commission can reach 10 percent to 20 percent.
