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How Realistic Is It To Negotiate Commissions

You would think that in these challenging economic times that all businesses would be willing to enter into negotiations for the price of goods and services. However, the real estate industry continues to resist attempts by consumers to negotiate their price for services.

Most real estate agents will not even entertain a conversation of negotiating their commission. Most agents will say that their non-negotiable price is 6% of the sales price.

In some instances agents may be willing to reduce their commission to 5% of the sales price if they think it means they will secure the listing away from another agent. However, attempts at negotiating lower than 5% will usually fall upon deaf ears.

Why are agents not willing to negotiate their commission? For instance, if your home is $1,000,000, why do they insist upon the same 6% as they would if your home were worth $100,000. They could reduce their commission to 3% for the $1,000,000 home and still make $24,000 more than they would selling the $100,000 home.

The only logical explanation is that the industry continues to manipulate pricing to ensure that the consumer has limited choices. Some might call this a classic example of a monopoly and a restraint on free trade.

However, thanks to business models such as ours, the consumer now has a choice and can exert influence over pricing in the real estate industry. Market competition is good for consumers and at Flat Fee we believe that the consumer should dictate pricing, not the other way around.

Interested in Flat Fee and our sustainable business model? Contact us.

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