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INSIDE TIPS HOW TO SHAVE REAL ESTATE AGENT COMMISSIONS NOW
By Kerry Hannon

(MONEY Magazine) – A surprising new study by the Consumer Federation of America (CFA), a private advocacy group, suggests that the 6% to 7% sales commissions most home sellers today routinely pay to real estate agents may well be negotiable. Specifically, the CFA, which interviewed more than 500 agents across the U.S., found that commissions are now often flexible at least sometimes in 24 of the 27 major metropolitan areas it studied last summer (exceptions: the strong housing markets of Chicago, Cincinnati and Houston). As the map based on the study shows (above), real estate agents are most willing to cut their fees -- up to one percentage point -- in Long Beach, Calif.; Newark; Oakland; Pittsburgh; and San Francisco. Agents in California and New Jersey may be willing to make concessions because the high house prices there (median sales price: $189,000 to $262,000) keep even discounted commissions hefty. In Pittsburgh, agents are willing to reduce their fees because of the stable sales volume. The study also found that agents at small local brokerages tend to be more willing to bargain than those at nationwide firms such as Coldwell Banker and Prudential. The large brokerages often set commission rates at the national headquarters. But, says David Liniger, chief executive of Re/Max, the second largest U.S. brokerage: ''Sellers should always bring up the subject of negotiating with the agents.'' And why not? Cutting the commission by even a single percentage point can save you $1,000 on the median-priced house in America. A few tips: -- Try to strike a deal up front. Once you've selected an agent, discuss the possibility of paying only a 5% or 6% commission. When the two of you do agree on a fee, be sure the agent puts it in writing and specifies that the agreement won't affect the buyer's agent. -- Push even harder for a discount if you are using the agent both to sell your house and to buy another. Some agents will charge as much as two percentage points less on the sale if they can make two commissions with you. -- Your agent may be willing to reduce the fee if you get an offer a bit below the price you will accept. When only a relatively small sum appears to be holding up a deal, agents can make up the difference by taking less in fees.