Realtor commissions are fees that realtors charge for finding tenants. Local customs dictate whether the landlord or tenant pays these fees. Fees vary, but are typically one month’s rent. As a commission percentage is not fixed by law, you are free to negotiate if you have to pay these fees. Negotiating for a lower commission cuts your personal expenses when securing a new rental property.
Be polite and respectful
The way you present yourself can greatly influence the outcome of your negotiation. Studies show that it takes only seven seconds for someone to make a first impression of you. Once they have formed that first impression, it will be difficult to change their mind. Seven seconds isn’t a lot of time, so it’s important to get the most out of your first contact. Above all, keep in mind that you want to be polite and respectful. You can achieve this in several ways:
The way you dress can show that you respect the real estate agent you are dealing with. You don’t need to wear a suit, but other clothes that you would wear to a job interview are appropriate. Make sure they are ironed, clean and present a professional image.
Greet the real estate agent with a handshake and a warm smile. Keep your body language open and accessible. Give the real estate agent a space to talk without interruption. When it’s your turn to speak, speak in an even, polite tone that shows respect.
Show you’ve researched the rental market
Rental markets across the country are experiencing peaks and troughs: times when properties move quickly and times when real estate agents have a rental surplus that they are struggling to fill. So, do your research in the local market before you start negotiating a real estate agent’s commission. Showing that you’ve done your research puts you on an equal footing with the real estate agent and strengthens your record.
Realtors are generally more willing to negotiate when their business is booming. When rentals fill up fast, they know it won’t be long before they get their next commission. Monitor the real estate market and see how long it takes for vacant rentals to find new tenants. When you see that properties are changing rapidly, take note of this when you trade.
If you have to sign a new lease during a slow patch, don’t be discouraged. While realtors may be more reluctant to move their commissions, you may still have some leeway. Better to receive a discount commission from you than no commission at all. You could say something like, “I know the local rental market is slow right now, so your commissions are hard to come by. I’m willing to give you a commission, but I don’t want to pay what you ask for. Could we all be happy with a 10% discount? “
Promise repeat business
Your real estate agent may be more willing to move if they think you can earn them more commissions. You can do this in several ways. You could promise that you will research the agency’s listings when you rent your next property or buy a home. If you are loyal to the real estate agent, you will likely pay the commission multiple times.
You can also promise to promote the business to others. For example, you could offer to refer your friends to their agency if they reduce your commission. People trust the recommendations their friends give them, so encouraging your approval can be a great way for agencies to grow their business. You can have additional leverage if you have a large number of social media followers.
Suggest another arrangement
Most real estate agents charge a one-time real estate agent’s commission for the duration of the lease. If you’re having trouble paying the commission, suggest an alternative arrangement where you pay a commission every time you extend your lease. This type of arrangement makes it much easier to budget your finances. Your real estate agent can accept a lower commission now if they know you will pay these additional commissions over time. If you have compelling reasons for staying in the area, such as moving to be closer to your family, share them so the real estate agent knows you intend to stay.
Appeal to their emotions
Real estate agents are people too, so don’t be afraid to play on their emotions. While logic usually trumps sentiment during negotiations, sincere emotional advocacy can help seal the deal. Consider the reasons why you want to save money on your commission and entrust them to the real estate agent. You may have significant moving expenses because you are moving to another state. Share any circumstances that might make the real estate agent more sympathetic to you and willing to give up their commission.
Say you’ll find another location
If all else fails, suggest that you are ready to keep looking. Realtors don’t want to miss out on a guaranteed tenant, so most will gladly reduce their commissions, even by a small amount. It is often enough to remind a real estate agent that you have other options to sweeten the deal.
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