Listing Agreement: Asking the Agent About Commission Rate and Transaction Fee
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Listing Agreement: Asking the Agent About Commission Rate and Transaction Fee

Find a listing rate both you and the agent can live with. A transaction fee is a charge to you over and above the commission. Beware if you do sign a listing with the transaction fee in it. It will crop up again at closing, and you may be obligated to pay it because you agreed to it in the listing.
                           real estate agent commission rate

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What commission rate do you want?

This, of course, is the big question. You ask it and the agent will tell you. However, no matter what the agent says, remember that in real estate, everything is negotiable. If the agent says 7 percent (or, worse 8 percent), that doesn't mean you have to accept. Take what the agent initially demands as the starting point for negotiations, and try to work downward from there. The agent asks 7 or 8 percent, you offer 4. Is there room to compromise? Some agents won't. They'll tell you they are worth every penny of what they ask and they're so busy they simply won't (or don't need to) accept less. If the agent is adamant, then if you think he or she is worthwhile, pay it. Otherwise, look elsewhere. Remember, the commission is whatever you finally say it is. It's not what the agent demands it to be. However, don't be pennywise and pound foolish. If you negotiate an agent down to a level where he or she grudgingly takes your listing, you may have just guaranteed a long wait for a sale. This agent may simply put your listing on the back burner and not work it. Try to find middle ground. Find a listing rate both you and the agent can live with.

Is there a transaction fee?

Don't forget to ask this question. And read the listing agreement carefully to be sure it's not in there. A transaction fee is a charge to you over and above the commission. It can be as high as $500, sometimes more. It goes directly to the agent's office, usually bypassing the agent. Some offices have instituted it because they're paying their top agents such high splits (80 percent in some cases) that they can't afford to stay in business otherwise. So, they're trying to get the money from the client. However, you are under no obligation to bail out the listing office. How they do business in their business, not yours. It's a good idea to insist that any transaction fee be deleted from the listing. If the agent refuses (or says that his or her broker won't accept a listing without it), then remind that agent how many other agents are beating down your door to get your listing. By the way, beware if you do sign a listing with the transaction fee in it. It will crop up again at closing, and you may be obligated to pay it because you agreed to it in the listing.

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Comments (1)

Thank you for the money tips in dealing with an agent for real estate. This is a touchy situation because of what you mentioned about dealing low and getting the short end of the stick.

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