This episode of Investor Insight explores what if any negotiating room investors have in setting commissions for their Realtors, and what if any downside is there to doing that.
Video transcript below:
Jemima Codrington: The relationship between a realtor and an investor is one that can be mutually beneficial and profitable. But many investors are wondering if they can negotiate the standard commission rate and if so at what cost.
Hi, I’m Jemima Codrington and welcome to Investor Insight on Crew TV.
With the standard commission rate sitting around 5%, many investors are left wondering, what this fee is for. As an investor, do you need a realtor?
Shawn Maher, Maher Property Holdings Ltd.
Shawn Maher: I think it is very important to have a really good realtor on site with you if you are looking towards the investment market. A lot of people tend to overpay for properties not realising that they are overpaying for them. A good realtor will bring value to yourself when you are in the market place.
The best thing you can do is buy a property that’s undervalued. That’s the best way to actually increase your value of the property instead of a buy and hold strategy.
Jemima Codrington: But like everything in life, you get what you pay for. There are some potential pitfalls to avoid when negotiating the rates.
Tarik Gidamy, TheRedPin.com
Tarik Gidamy: Commissions are always negotiable based on performance and in a keen world, I think that the ideal thing is leave commissions out of it and you know because when you argue about commissions and an agent really lets himself down and gives you a reduced commission, that means technically that if they can’t negotiate their own commission, then how are they supposed to negotiate the biggest transaction in your life. You want somebody strong.