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Negotiating real estate commissions
5 Tips: You can negotiate down from the standard 6% commission. Here's how.
By Gerri Willis, contributing columnist

NEW YORK ( - Real estate brokers have tried to hold to their six percent commission.

But with increased competition and reduced demand from customers, you may be able to negotiate for a lower commission. Here at Five Tips, we'll tell you how.

1. It's your right

The average real estate commission has come down from 6 percent in the early 90s to about 5 percent on average. But remember, no matter what the going rate is, you should be able to haggle. By law, commission must be negotiated. Otherwise it's known as price fixing. If you manage to negotiate even a one point difference in commission, you can save thousands of dollars.

2. Gather your strength

The truth is, now is a great time to drive a hard bargain. The Internet has created even more competition in an already crowded arena. You naturally have a negotiating edge. However, if your house is in good condition in a desirable location, you have even more of an edge.

To get the most out of your bargaining, you should get at least three or four commission estimates from agents and use that information to pit agents against each other. To really do your homework, get the agent's qualifications and take note of any weaknesses in their record, like a disciplinary action or a very inactive selling period.

3. Negotiate elsewhere

When it comes to tough negotiations, you may want to step outside your home. We're taught to be polite to guests in our homes, says Brad Inman of Inman News.

"It's tough to play hardball when your ten-year-old son is in the next room," he says. You may want to take your negotiations to your office, or a friend's home.

Don't forget, you can negotiate the marketing plan. You can bargain about everything from the quality of the photographer to the frequency of open houses to the types of advertising you expect.

4. Try the laddered approach

Think incentives. Using a laddered approach with your agent can help keep your agent on their toes. In the laddering approach, you would offer your agent a bonus or an increase in their commission if they sell your home for a specific target price. But remember this may take some delicate negotiations since most agents aren't eager to do business this way, says Inman.

5. There are alternatives

If you don't want to use a full-service real estate agent to sell your home at all, but you would still like some help in selling your home there are alternatives.

You can turn to discount brokers, who may charge commissions of 3 percent. Check out some discounted brokers at or

You can also find brokers who will charge you for a la carte services. This way, if you just want some help listing your home on the Internet or negotiating contracts, you can bargain for these services. Some Web sites you may want to check out for this include and


Gerri Willis is a personal finance editor for CNN Business News and the host for Open House. Send your questions, your comments and your own ideas to us at 5tips@cnn.comTop of page

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