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Most homebuyers and sellers don’t try to negotiate a lower commission with their agent, but most who do are successful, according to a new survey by the loan comparison website LendingTree.
Although they’ve had some trouble making their case in a slew of recent court cases, Realtors have consistently said that commissions are negotiable and determined by the market.
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LendingTree’s Jan. 17-19 survey of 2,034 U.S. consumers seems to lend at least some support to the National Association of Realtors’ contention that commissions aren’t set in stone.
The LendingTree survey found that only 31 percent of homebuyers or sellers tried to negotiate a lower commission, but that 64 percent of those who did succeeded.
Jacob Channel
“Like most things in life, you won’t know if your real estate agent will be willing to lower their commission fee until you ask,” LendingTree Senior Economist Jacob Channel said in commentary accompanying the survey.
LendingTree’s results are consistent with a 2008 analysis by Consumer Reports, which found that among the 46 percent of sellers who tried to negotiate a lower commission, 76 percent succeeded.
But only 1 in 5 of those surveyed by LendingTree think that sellers should pay the buyer’s agents’ fees — the issue at the heart of multiple antitrust lawsuits nationwide threatening to upend the industry.
LendingTree found that 84 percent of those surveyed think real estate agents should be flexible with their fees — a proportion that’s even higher among Baby Boomers (92 percent) and those with six-figure incomes (91 percent).
The good news for those making a living in real estate is that 64 percent of Americans surveyed by LendingTree see real estate agents as a necessary part of the homebuying process, and only 9 percent said they’re not needed.
Stephen Brobeck, a senior fellow at the Consumer Federation of America (CFA), called it “highly misleading” to report that nearly two-thirds of homebuyers or sellers who asked their agent for a lower rate received one.
Few buyers try to negotiate commission rates “because they are told (in the existing system) that these commissions are paid by sellers,” so it would be important to know how many sellers tried to negotiate and how many were successful, Brobeck said in comments provided to Inman.
In a 2019 investigation, the CFA found that only 27 percent of 200 agents it queried as a prospective seller were willing to negotiate their compensation.
“Since many sellers never seek a lower rate, the percentage of all home sellers receiving a lower rate would likely be well below 27 percent,” Brobeck wrote.
Some agents complained that the CFA’s methodology didn’t consider industry norms and regulations regarding commissions.
One agent said she does not “discuss commissions over the phone with someone who is just shopping,” for example, preferring to have that discussion at an initial consultation.
Editor’s note: This story has been updated to include perspective from the Consumer Federation of America’s Stephen Brobeck.
