How to Negotiate a Commission Reduction!

by Nanette Parks –

negotiation_interpretersNormally commission is the LAST thing a Realtor will discuss with a potential Seller.  Given the opportunity, they will  first try to sell you on all the bells and whistles they can perform before dropping the bomb on how much it will cost!  If the sticker shock doesn’t raise a few sweat beads on the brow, go ahead and sign on the bottom line and be comforted by the fact that many a Seller have gone before you in doing this and lived to tell the story.

But what if those heart palpitations are urging you to do something else?    Knowing how to negotiate and using the leverage that you have,  can save hundreds  if not thousands of dollars in commission.  I often call this “making money with your mouth!”  If you don’t open your mouth and ask for something, odds are you won’t get it!


If any Realtors are reading this, their eyes are rolling and steam is coming out of their ears at the mere thought of making this a known fact that commissions ARE negotiable!  The truth of the matter is, “if you have a strong negotiating position” – you have leverage, and with that comes power. But before you go wielding power you don’t have, you need to understand that you may be stepping into a lions cage if not approached correctly!   After all, how would you re-act to your boss asking you to work for free or less pay?  Essentially that is what you are asking for.

The first thing you need to understand is how commissions work.  Most Sellers understand this, but it is worth repeating.   When you sign a listing contract,  let’s say for 6% commission on the sale price – 3% will go to the Listing Brokerage and 3% will go to the Selling Brokerage.  If you want your home to be shown by other Realtors, there is NO getting around the 3% on the Selling side.   Trust me when I say this, even reducing it to 2.5% will have Realtors moving away from your property if they can find an equal property for their buyer at a higher commission.  Simply put, don’t  ask to reduce that amount.


Having a house to sell and buying another one locally is the GREATEST leverage you can have with a Realtor.  

There are no rules that if you list your home with one Realtor, that you have to purchase your next home from the same Realtor, but we sure do like it when we have earned that trust, you let us!  In essence you are allowing us to make two commissions instead of one!  I don’t care what the price range of your home is, if you are giving me an opportunity to make a commission off of you and a GREATER one off of the home you will purchase, there is room for “some” negotiation.

It is wise to note, however, the  higher the amount of the commissions to be earned , the more leverage you will have.   Smaller commissions won’t carry as much weight.


When interviewing Realtors just ASK the question:  “ If I agree to let you sell my home and will sign an agreement that allows you to assist me on the purchase of my next home, can you lower the commission on selling my home.”   After you ask this question, shut up.  Don’t say another word until they do.  No matter how uncomfortable a silence can get, the next person who opens their mouth, usually is the one who loses.

How good of a deal  can you expect to get?   The key is in the balance of a Win/Win for everyone involved.  Even a $100 savings is REAL money – better spent in  your pocket right?


When negotiating the sale of your home, you want a Realtor who has the skills to keep as much money in your pocket as they can keep in their own!    While it would be nice if your Realtor cut you at least a small break, don’t be discouraged or write this Realtor off  if they don’t .   This could be a sign of a very strong negotiator and will pay off for you later!    If nothing else, this is a great exercise in seeing what skill sets your Realtor will being using when negotiating on your behalf!

Thinking of Building?  Click HERE and get the free guide on how TREO will negotiate thousands of dollars in commission when you are building a home!


Nanette Parks
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