Buying a home can be expensive, from down payments to closing costs, but negotiating lower fees can make your mortgage payments more affordable.
According to the New York Times, Americans pay about $100 billion in real estate brokerage fees nationwide each year, and U.S. agents have some of the highest commissions in the world. These boards were the focus of much debate after the National Association of Realtors (NAR) settled a series of lawsuits earlier this year.
Before the lawsuit, many full-service agents in Minnesota typically charged sellers a 5% to 6% commission that they paid to the listing broker, who then split it among the various agents and brokers involved in the transaction.
You might be able to get a better deal now. However, it also means that you will need to negotiate how and how much you will pay your real estate agent in a written representation agreement that sets out the details.
Here are some tips to make it work.
For some, the most difficult step is asking your real estate agent about their fees.
Sharon Press, director of the Dispute Resolution Institute at Mitchell Hamline School of Law, said many people become reluctant to negotiate.
“We all negotiate in our daily lives,” Press said. “Deciding where to go to dinner with your partner is a negotiation, and telling the kids it’s time for bed is a negotiation.”
