Are real estate commission fees negotiable?

So, first let’s talk about how does an agent make their money?

Whether helping a client buy or sell a home, a commission fee is earned for work performed. The fee is actually paid directly to the brokerage firm the agent is affiliated with from the selling party in North Carolina, and then the selling firm pays the buyer agents firm. Firm fees are typically subtracted first and the agents are paid afterwards. It always seems to a client that an agent makes so much per sale, when in actuality it is a small percentage after factoring in the cost to earn and keep a real estate license and that they are paying for the cost of business personally as an independent contractor.

The short answer is, YES – absolutely, commission fees are usually a percentage of the sale and should always be negotiable.  Most areas of the country have expectations for what an agent will earn based on local trends in the market, similar to an hourly rate of pay for different professions. In our area, a typical buyer side sale would be an average sales price of $220,000 with a 2.4% buy side commission. Where a listing commission ranges – with most full service agents charging around 3.6% – but nothing is set in stone, the fees are always negotiable. My theory is that you get what you pay for. Keep in mind that the following expenses come out of that fee: real estate firm split (variable based on what the agent negotiates), cost of doing business and maintaining their licensing, paying Uncle Sam, etc. If you have concerns about asking the listing agent, don’t hesitate, a good agent can explain to you how they get paid and what they do with that money. After all, you need to know what you are paying for!