This is a common question in the negotiations to list a home for sale. In these times when every dollar needs to be put to good use it is understandable. Unfortunately it is often not answered, or not correctly answered.
A disturbing trend seems to be to discount the commission. While this may work for some, for most it leads to potential disaster! Think about it; how often do you get more than you pay for? The math is relatively simple (for my example anyway).
First, remember, the commission is NOT the agent’s pay! Generally ½ is the amount going to the brokerage, then paying for the marketing, the agent’s office and professional expenses, your home warranty (if provided), and hopefully some pay for the agent’s time. The other ½ goes to the selling side to cover similar expenses on their side. (This split is not set and can vary by transaction).
If an agent agrees to discount the commission very few of those dollars will come from his/her pocket. Most of the money just given away is someone else’s! Is this the best situation for you? Is this getting the best and most positive exposure for your home? What will happen when it comes time to negotiate the price with a qualified buyer? Is your money next?
We realize you might think we’re biased, so here is a link to an outside study showing the disbursement of the commissions: