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Show HN: Home sellers: incentivize your agent to get you a higher sale price
I’m currently starting the process of selling a house for the first time (wish me luck!). As part of this, I began investigating the world of listing agents and their commission models and, like many before me, was pretty disappointed with the incentives built into the usual fixed-percentage commission structures: Basically the most rational thing for a listing agent to do under this model is to convince you to sell for whatever semi-reasonable price you can get quickly and without too much effort.
This is especially concerning given the amounts of money involved — real estate sales and purchases tend to be among the biggest and most consequential ones people make in their entire lives.
I wondered: what approach do I wish I could take, particularly one that doesn’t require “changing the whole broken system”. My favorite answer so far is Progressive Commissions: which reward listing agents very little for just getting a sale done at a low price, but scale up the reward quickly if they can get you a better and better sale price.
This page is a dynamic explainer / calculator to help people understand the concept and even come up with a specific commission structure that works for their home sale.
- ajcatton 1y agoHere's a filled-in example to see what it looks like with some prices filled in: https://progressivecommission.com/?minPrice=1000000&targetPrice=1400000&startRate=0.005&rateIncrease=0.02&buyerRate=0.025&standardRate=0.025&discountRate=0.01&fixedListingFee=10000¤cy=USD https://progressivecommission.com/?minPrice=1000000&targetPr...
- pestatije 1y agohow are you supposed to set the commission structure on any agent?
- ajcatton 1y agoAs a home seller, you sign a listing agreement with an agent to represent you for the sale. As with any agreement, you can negotiate the terms, including the commission structure for the listing agent / brokerage [within any applicable laws and regulations where you will be listing]. Of course, some may have (or say they have) standard terms they must use, but that's something anyone can say in any negotiation. Either side can always refuse to budge on terms, and the negotiation may not result in an agreement. All good: you just find another agent who wants your listing. One thing to note is that, in the current world at least, you probably want to keep pretty standard Buyer Commission terms in your agreement (here in Ontario, Canada this is typically 2.5% of the sale price, paid by the seller). This is to make sure Buyer agents want to send buyers your way just as much as for any other home. Does that answer your question well enough? Happy to say more if it's useful..
- ajcatton 1y agoThe page even has a way to generate an example clause commission describing the commission structure to insert into a listing agreement (of course, after everyone is satisfied with the language, has had a chance to have a real estate lawyer look at it, etc).