How to negotiate commissions with your real estate agent

"But a recent legal settlement has shaken up that system, opening the door for buyers and sellers to haggle over who pays what and how much. In the Bay Area, many agents ask for a 2.5% or 3% commission a rate they say is justified given their experience and market knowledge, and the time they take to help clients navigate the process of buying and selling a home."

"Matt Castillo, an East Bay agent, said that part of the reason agents set their fees around 2.5% is because it's so uncertain whether their client will actually close and the agent will get paid. You might be working with someone for a year, and they may never buy, he said. As a buyer, show an agent that you'll make their time worthwhile. Get preapproved for a loan. Make sure you understand your budget and how much home you can afford."

"Define how much help you really need. Some buyers want their agent to come along to every showing. Others want someone who will come in at the end and help negotiate the price. If you don't need an agent who will hold your hand, tell them. The same goes for sellers if you're handling certain parts already, like the staging or the photos, you may be able to get a price reduction."

For decades, home sellers covered both seller and buyer-broker commissions, limiting negotiation. A legal settlement now allows buyers and sellers to haggle over who pays which commission and how much. In the Bay Area, many agents request 2.5%–3% commissions, citing experience, market knowledge, and time spent guiding clients. Brokerages often take 15%–30% of that commission, which pressures agents to maintain common fee levels. Some agents will not lower rates, while others will under specific circumstances. Buyers and sellers can gain leverage by demonstrating seriousness, securing loan preapproval, clarifying needed services, showing motivation, and handling tasks like staging or photos.

Read at www.mercurynews.com