How to negotiate commissions with your real estate agent

"For decades, home sellers typically covered both their own agent's commission and the fee for the buyer's broker, a structure that left little room for negotiation. But a recent legal settlement has shaken up that system, opening the door for buyers and sellers to haggle over who pays what - and how much. In the Bay Area, many agents ask for a 2.5% or 3% commission - a rate they say is justified given their experience and market knowledge,"

"Although some agents don't budge on their rates, some will under the right circumstances. Here's how a buyer or seller can strengthen their hand in negotiations: Show that you're serious. Matt Castillo, an East Bay agent, said that part of the reason agents set their fees around 2.5% is because it's so uncertain whether their client will actually close - and the agent will get paid."

A legal settlement has allowed buyers and sellers to negotiate who pays broker commissions, changing the long-standing practice of sellers covering both sides. Typical Bay Area buyer-agent commissions run around 2.5% to 3%, partly justified by agent expertise and the time required to navigate transactions. Brokerages often take 15% to 30% of agents' commissions, which pressures agents to keep listed fees near 2.5%. Agents may negotiate fees in certain circumstances. Buyers can strengthen bargaining position by obtaining mortgage preapproval and clarifying budgets. Sellers can show strong motivation and offer to handle tasks like staging or photography to reduce agent involvement and fees.

Read at The Mercury News