It's understandable that many sellers are looking for agents to shave commissions at a time of economic distress.What few people understand, however, is that saving a few dollars on the commission may actually hurt you in the long run.The clichés of "you get what you pay for" and "there's no such thing as a free lunch" never rang more true. (Note: Foxtons tried the model of 2% commissions and they're out of business.)
Here are the five reasons why you may want to rethink your negotiations.
1. Times have changed: Counter-intuitively, downturns are the worst times to cut commissions. It's actually times like these in which you get the best bang for your buck for every cent of the commission. Why? During the boom years, houses basically sold themselves. Therefore, the difference between a good selling agent and a bad one became murky because everything was selling so quickly. Now, properties are on market for 2-4 times longer, meaning that the quality and skill of the broker actually matters, and then some.
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