You Can Negotiate with Realtors

KCAL-TV Business and Consumer News reporter Alan Mendelson interviewed Right Home President Paul Yalnezian for a segment that aired November 1 and 6, 2005, on Channel 9 News.

The Transcript of the News Segment

KCAL News Anchorman: Speaking of money, it's estimated that in one half of home sales, the same Realtor^® is representing both the buyer and the seller. As KCAL 9’s money man Alan Mendelson tells us now, some people consider that a conflict of interest.

Alan Mendelson: The standard real estate commission is now 5%; some might charge 6%. When Lisa Roman decided to put her own home up for sale, she said that Realtor^®s did not offer to negotiate their commission.

Lisa Roman: No, no one really offered that, no one, no, that’s their job you know, it’s an agent and that’s how they make money…

Mendelson: So they stuck with that 5% quote.

Roman: Most people that’s what they charge, it’s the 5%.

Mendelson: But the real estate commissions are negotiable always, as Paul Yalnezian of Right Home Brokerage says...

Paul Yalnezian: Commissions are negotiable and you can negotiate any commission that you can get away with, and with today’s environment, you know real estate commissions are extremely high, especially when properties are selling so fast and there’s shortage of inventory.

Mendelson: Yalnezian also says that many home sellers don’t know that their Realtor^® might also be representing the buyer and collecting both the seller commission and the buyer commission.

Yalnezian: Because there is a possibility of making more money, that broker is going to be trying to find any buyer that he can represent so he can keep all the money instead of looking for the best buyer that will net the seller the most amount of money. This conflict of interest is so common that I really believe that it's costing consumers billions of dollars every year.

Mendelson: Now in the worst-case scenario, if you are the seller, your Realtor® might not bring all the other potential buyers’ offers to you. The potential is that one of those offers could come from a buyer who is represented by another Realtor^® and then your Realtor^® will have to split his commission with the other Realtor^®. Yalnezian is suggesting that if you are a seller and your Realtor^® also represents the buyer, that you try to have a lower commission.

Yalnezian: Very often you see that and smart sellers at least manage to negotiate that.

Mandleson: Yalnezian believes that about half of Realtor^®s represent both sellers and buyers.

That’s your money, Alan Mendelson, KCAL9 News. And here is a phone number to call Right Home for tips about home selling: 800-873-8373.

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