The recent housing dip provides an excellent opportunity for buyers and sellers to extract lower commissions from their real estate brokers. The commonly accepted rate of 6% can now be negotiated to around 4.5%.

In theory, of course, broker commissions are always negotiable. Setting up fixed commission rates has, in fact, been considered illegal since a 1950s Supreme Court ruling. But real estate brokers certainly don’t want you to know that. “The owners of the large [broker] firms want everyone to think the broker fee is 6%,” says Jay Michael, Labinov’s realtor and the founder of Estate Property Group, a boutique real estate firm in Chicago that, while a full-service brokerage, negotiates its fees with its clients, typically charging 4.5% to 5.5%.

To further increase your leverage:

Use the same broker to sell your current house and buy a new one. Negotiate an overall discount on both houses.

Use a smaller firm. Lower rates can be approved faster with fewer layers of bureaucracy.

Use a different broker. If one broker won’t negotiate, leave him/her and find one who will.

For the especially adventurous, consider using the internet to replace your broker altogether.
— CAREY GREENBERG-BERGER

More Real Estate Brokers Are Reducing Their 6% Fees [Smart Money via FreeMoneyFinance]
(Photo: brighterworlds)

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