Hiring a Real Estate Agent to Sell Your Home? Do This Before Signing That Contract

Selling a home can be an expensive prospect. Sure, you may be looking at a nice profit at the end of the day if you've been in your home for many years and its value now exceeds the amount you paid when you bought it. But you might also lose a large chunk of your home sale profit to the commission you have to pay your real estate agent.

It's common for real estate agents to charge a 6% commission on home sales. So if your home sells for $500,000, that could mean losing $30,000 off the bat. And you might need that $30,000 -- or at least some of it -- to put toward your next mortgage.

But now more so than ever, you may have a prime opportunity to talk your real estate agent down on their fee. Here's why.

The days of the 6% commission may be over

The National Association of Realtors (NAR) has more than 1 million Realtors under its umbrella. And rules established by the NAR effectively left home sellers paying a 6% commission for many years.

To be clear, not all real estate agents are Realtors. And agents who could operate outside of the NAR's rules had the option to set their own fees. It was Realtors alone who were bound to the NAR's standard 6% commission.

But recently, the NAR settled a massive lawsuit and is looking to eliminate the commission-related rules it had previously established. The result is that going forward, there may be more room for fee negotiation when hiring a real estate agent. So that's something you may want to take advantage of.

What's more, you may be in a good position to negotiate your real estate agent fees because right now, there's a shortage of available homes on the market. As such, local agents may be eager to drum up business. And they may be willing to cut their fees if it means getting hired.

Make sure you're getting good value for your money

You may or may not be able to get a real estate agent to lower their commission for selling your home. But if not, at least make certain you're getting good value in exchange for paying that fee.

For one thing, make sure you're hiring someone experienced who knows the local market. Also, see what services your fee entails. If your agent is going to not only market your home, but stage it as well, that alone might make their fee worth it, since hiring a separate home staging service could cost you extra.

The recent NAR settlement may or may not result in you saving money on the sale of your home. But either way, before signing that contract, try negotiating with your real estate agent to see if you can pay a smaller fee.

Remember, any home you buy after selling yours may be more costly because home prices are up these days. The more money you can take with you from the sale of your home, the better.