I had a mother who would negotiate anything from a batch of tomatoes to a living room sofa. It was the culture she grew up in and a little of it frankly rubbed off on me, which on several occasions has been a source of embarrassment to my husband. Now it seems that members of the younger generation are more in alignment with my mother than their mothers. Having access to all kinds of online information, they’re starting to ask for discounts or at least creative ways to get their properties sold.
Most millennials are just as comfortable surfing the net as their parents were with their touch tone phones. With almost everything you need to know about buying and selling real estate accessible from a keyboard, it’s the perfect place to start for novice buyers and sellers, but this generation is taking it a step further. Not only are they doing an extraordinary amount of research, but they’re turning the information into their ability to negotiate commissions.
Some of the more creative commission structures involve half a point higher for the selling agent, something that I did a lot of years ago when I marketed corporate relocation properties. Also, buyer and selling agent bonuses or perks, if the final sale price comes in above listing. Tiered commissions that are geared to shorten the marketing period also are getting the younger generation’s attention. Typically, you would start the process at 5 or 6 percent commission, which decreases on an agreed upon downward scale the longer the property remains unsold.
Negotiating commission becomes even more common in the luxury market. The logic that sellers subscribe to is, “Why does it take twice as much work to market a $2 million property over a $1 million property?”
Getting in the mix of realtor commissions are discount online companies like Redfin and a new one REX Real Estate Exchange, that just started doing business on New York’s Long Island, one of the costliest real estate markets in the country. These companies generally charge between 1.5 and 2 percent and forego using local multiple listing services.
According to Real Trends, a real estate research firm, fees are trending downward from last year’s average rate of 5.12 percent, which is down from 5.26 in 2015. This could also be a result of the overall increase in selling prices around the country.
Despite all the data available, very few sellers negotiate real estate commissions, many of whom aren’t even aware that this is an option, and there is a good reason for that. Real estate professionals are still the best place to go to for on-the-ground advice and strategies. The knowledge they accrue, especially in a specialized area like Anna Maria Island, is invaluable. They have the pulse of an ever-changing market relative to incoming buyers, price points and location.
Millennials may be OK when their computer screen tells them their buyer just walked across the street because their price was too high for the location. However, most of us need a flesh and blood person to take care of what to many people is the largest financial investment we will ever negotiate.
Everyone wants a deal and wants to save money, and that’s a good thing if you don’t sacrifice quality and service. In the words of my mother, “Can’t you do better than that?” Sometimes yes and sometimes no, and sometimes the outcome is the deciding factor.
