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Negotiating San Diego Real Estate Agent Fees


Can home buyers, sellers and real estate investors negotiate San Diego realtor fees?

Some don’t even think twice about paying fees to their realtor. Others immediately dismiss the idea of ever working with a San Diego real estate agent, or participating in a transaction that hosts a realtor. Others hit the web, social and online real estate forums to ask the real question: are realtor commissions negotiable?

So what’s the answer? If they can be negotiated, when is the right time to do it? Are SoCal real estate sales people really that overpaid? What more affordable alternative options are out there?

Why Negotiate Real Estate Agent Fees and Commissions?

Many fear working with realtors in San Diego because of the high fees they are associated with, or after reading about how grossly overpaid they are. Sometimes the numbers just don’t appear to work in light of a 6% fee when buying or selling a home in Southern California. It might work more often than some believe, but it can be an issue. A little more room in a deal might make it work. It may make more deals possible. They do say that “everything is negotiable in real estate,” so why not professional fees? After all; everyone ought to be looking for the best possible deal, and few think twice about haggling with mortgage lenders or housing contractors.

Are Realtor Commissions too High?

Before really digging into when to try and negotiate and by how much, perhaps it’s best to tackle the cause of this question: the perception that California realtors are overcompensated.

Admittedly, some might be. Some may do very little for very huge checks. However, this doesn’t mean the same goes for everyone. For starters, remember that to get to where they are these individuals have normally invested a lot of time in real estate education, learning, networking and making connections. Moreover, few realtors make as much as you may think. In fact, many might barely make minimum wage. Even in a transaction that grosses 6% of the purchase, fees are often split between buying and selling agents. Subsequently, those agents normally have to split with their brokers too. That can be as much as 50%, especially at national branded chains, and among newer realtors. This alone can slash $6,000 in gross commissions down to just $1,500. Then there are the expenses these agents have to maintain everyday, as well as the specific costs associated with the transaction.

When to Negotiate San Diego Realtor Fees

When buying a home in San Diego, there can be a number of scenarios in which buyers can have some extra negotiating power. This includes new construction, which often pays out high rates of commission to real estate agents. Those with access to the MLS can also pinpoint other deals – some of which may offer higher than normal commissions or bonuses to agents that can create negotiating room.

Real estate investors with proven track records can flex their muscle a little. Clearly, if you are bringing deals to the table for an agent every month, without them having to go out and get new business, you are providing them with value. In return, they can at least provide you with some negotiating room. Regular San Diego homebuyers might find some slack if they are both buying and selling homes, or are buying very high end homes. In select cases, there may be reasons to ask for an agent to pitch in later. Perhaps home inspection reports come back showing an extreme amount of unexpected repairs that just kill your appetite for the deal. If both agents would be willing to give up 1% of their commission to help, it could be the best win-win-win for all parties.

The same goes for selling houses in San Diego, CA. Sellers may also be able to negotiate based upon the services the Realtor will provide. If open houses, video tours, and glossy brochures aren’t necessary, this could save the realtor a lot of money, and you too.

Know When to Stop

Truly intelligent San Diego home buyers, sellers, and investors will know when to stop pushing hard for discounts. At some point, it can become counterproductive. If by the end of the negotiations the real estate agent dislikes you, and isn’t making enough to bother to actually spend anytime on the deal, you’ve gone too far, and may not save anything at all. Know when to appreciate value, trust, relationships and effective professionals that get the job done right.

If Realtors won’t negotiate, or the deal still doesn’t make sense, look for other alternatives. Consider looking to private sellers or real estate wholesalers for house deals

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