Why Low Commissions Are Bad For Home Sellers

Whether you are selling your home as an owner or an agent, there are many reasons why charging low commissions will be counterproductive to you. You will need to study the market to know what kind of commissions is good for the general good of the housing market. Here are reasons why low commissions are bad:

  1. You are not saving money.

Low commissions are bad for home sellers because you are not going to save any money when you have a lower commission than all of the other homes on the market you are competing with. For example, most homes are going on the market for $500,000. You have had an interview with 3 agents and 2 of them are willing to charge you a 5% commission. You ask these 2 agents if they can consider lowering the commission and they are noncommittal.  The third agent says they will only charge you 4%. In your mind, you are probably thinking you just saved $5000 which is wrong because the agent you have listed the home with is only offering 2% fee to the buyer’s agent. Keep in mind that for every home you are competing against in your market, the buyer’s agent is getting 2.5%. So when you think you are saving $5000 you are actually not. The house buyers in Secaucus don’t charge the 3% buyer agent commission which will ensure the sellers save even $1000s more.

  1. Slows down the sales.

For a home seller, low commissions will slow down the sales. This is because you will be cutting out very successful agents from showing your property. According to how the commission is split, agents don’t usually earn as much. Today most buyers want to see every property that meets their criteria. Clients expect lunch and dinner as well as you must pay for the gas. After showing properties to buyers, expect hours of paperwork required for arranging for more showings or writing contracts and negotiations. Often, by the time the two brokers split the commission and then the broker and the agent split their half of the commission there isn’t a lot left over.


Considering that there are agents who don’t want to work for pennies, offering a strong commission is going to bring all of the agents to the table. In order for you to sell your house quickly, you should offer a high commission. This will bring many agents representing buyers on to the table who will want to see your home. For example, if your listing shows up with 3% commission many agents will show your home to buyers compared to similar homes offering 5% sales.

  1. Less convincing.

Most home sales will involve two agents. There are the listing agents from one brokerage and there will be the other listing agent who is buying the house on behalf of a buyer. The sale will usually be as a result of the arrangements by a local MLS as well as the most powerful sales tools that can be used to determine the right price of a home. If your listing agent has other homes listed for sale at 6 and 5 percent commission, they might not put as much time or effort into selling your low commission home. When selling your house in Hudson county, their rates fall as low as 3% total which includes 2% given to the buyer’s agent. The less you pay in commission the more money you will save.


Download our
FREE Market Guide

  • This field is for validation purposes and should be left unchanged.

See Our Google Reviews

Alfredo Garcia
Alfredo Garcia
03:20 17 Jun 21
Selling my property too Ken was the best thing I did. Although I was skeptical at first I soon found out how... professional he was. Even though my closing contract was not standard because of the pendemic situation. He followed through on time with all the contract terms as promised. Thank you Ken for your professionalism.Alfredo Gread more
Christopher Martino
Christopher Martino
14:19 10 Mar 21
Ken and his team were great. They were easy to work with, professional, and responsive. If you are thinking of selling... your home they offer a super easy process.read more
Chelsea Grant
Chelsea Grant
15:36 03 Jan 21
I am a travel nurse and stayed in a town home for 3 months... It was exactly as described and any issue that came about... was handled within a few hours - I would definitely recommend and I would definitely stay again!read more
Aaron Zachko
Aaron Zachko
12:41 14 Aug 20
Amazing experience! Ken was upfront, quick and got the deal done in no time. Having done a number of real estate... transactions this was by far the easiest and smoothest. I would unconditionally recommend him to anyone looking for an easy, quick and fair transaction.read more
Joseph Tricarico
Joseph Tricarico
19:10 26 Mar 20
Ken is a very professional individual from start to finish. As promised, he gave me a fair deal on my one of my... properties that was in rough shape. He was knowledgeable and responsive to my requests and as promised we didn't need to waste time with inspections and appraisals and we closed quickly. He made it painless as possible by having his crew handle the clean up. This was truly a quick and easy process but a professional individual. Thanks Ken!read more
Next Reviews

Site Map
Privacy Policy

Click for the BBB Business Review of Cash Buyer New Jersey