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REAL ESTATE COMMISSIONS

Real estate commissions. In one rather small county in NJ, we have over 7,000 licensed real estate agents. Why? We have some of the highest median home prices in the country. Agents like to sell a $1m house with a  6% commission – especially those that sell themselves in a couple days. 

FOXTONS, the company that first showed us 2% commissions then was eventually sold with US unit being left alone, finally has filed for bankruptcy protection. 

While their concept was easy to understand, there just wasn’t enough profit with these commissions and their method of advertising and overhead to maintain. HOWEVER, you should KNOW, you can negotiate a  real estate commission.

It is illegal under most state laws to set a fixed price on real estate commissions.

In many parts of the country the "standard" commission is or was 6%. Again, you can work this. You may also be told "you get what you pay for". Interview local real estate agents when you go to BUY or SELL a home. Work with someone that you feel confident has the skills to find you a anew home or sell your current one - or both.

In most new developments, you will deal directly with the developers in-house sales people. The commission may be built right into the price.

In addition, find out what developers are offering incentives to brokers to bring in clients. You may be able to bargain the sale price by a percentage offered as an incentive.

Don't be afraid to ask for a reduction in commission if you are buying or selling your home.

If the agent represents the seller and you are the buyer, then that agent is "getting both" sides of the deal as there is not another agent to spilt the commission.

When I buy a home, I am not loyal to one agent - I will go directly to the agent who listed the home for sale. They may have more an incentive then if you came in with another broker. It's the "why should I share" attitude. Not good for the seller nor for you, but it happens.

Good Luck.

Disclaimer: The law is subject to  change and interpretation of the court. The information provided is for reference. Please consult an attorney for further assistance. 
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