Is the 6% you Pay in Real Estate Commission a

Is the 6% you Pay in Real Estate Commission a Figure that is Set in Stone?

All across the country, no matter what home prices look like - whether it's boom time like it was five years ago or it's bust like it's been ever since 2008, there's one thing in the whole homebuying (or selling) equation that never changes - it's the 6% broker commission that the buyer and the seller need to chip in to make up. Thankfully, homebuyers and sellers are finally coming to the conclusion that there is something they can do about this; that in a tough economy whenever one needs to cut back, brokers had better take a loss in the real estate commission they collect as well. One of the reasons people are able to negotiate with that figure is that real estate models have changed. These days, if you are willing to do a little bit of the legwork yourself, there are certain real estate broker services that you can undertake to do for yourself if you are interested in saving a little cash.

For instance, one of the services offered by a broker that she would wish to collect that 6% commission for is the one where she advertises your house in the local classifieds. Home sellers are beginning to realize that they can just pay an agent to have their listing placed on broker databases, to have their negotiating handled, and that they will pay nothing more than $300-$400 a month for it. And if they can go with agents all the way, they will ever have to pay any more than 5%. Those are serious savings. Even going with a real estate broker, the average commission paid last year was about 5.4%. That means that there is some negotiating going on. You don't ever have to just accept the 6% figure as set in stone even if you deal with the broker's real estate commission.

Under what circumstances might a broker accept a lower commission rate? Even if brokers claim that their 6% is completely justified considering all the marketing they put into your home and how they find you a great price and keep the difficult process of selling the home from touching you, for repeat customers, a 5% commission may be completely adequate.

A broker who works with a large real estate brokerage firm often only gets to keep half of the commission she earns on the sale. If she sells a home for you that's worth $500,000, the 6% real estate commission on that would work out to $30,000. She needs to hand half of that over to the buyer's broker; and then half of the remaining, she needs to hand over to her boss. She only gets to keep $7500. And then of course her expenses in promoting and selling your house come out of that. If you wish to really have some leeway negotiating with that figure though, you should probably go with an independent real estate broker and not with one who is part of a large firm.

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