Buyer’s Agt. Fee Option: Don’ Initially Offer

A logical option: Do not initially offer any commission to a cooperating Buyers Agent

Let's keep it simple

We have written in detail on this website how you, the home seller, will save a very large sum money with our 1% listing fee and still receive 100% full service.  Let’s now spend a little time discussing the buyer’s agents commission and the recent changes that are the outcome of the recent lawsuit settlement with NAR (National Association of Realtors) lawsuit.  There are two major changes in selling a home that are the outcome of the settlement.

  • It prohibits posting commissions to be paid to the buyer’s agent on MLS (Multiple Listing Service).
  • Also, it is now required that a buyer’s agent and a home buyer have an agreement on the compensation for the buyer’s agent before they show your home.-Note: This agreement commits the buyer to be responsible to the buyer’s agent for the commission agreed upon, if the seller does not offer one.  It is the hope and desire of the buyer that the seller will pay the commission for the buyer. For all practical purposes, if the seller is paying the buyer’s agent commission, the buyer is actually financing the commission, by a higher purchase price for the home and therefore not coming out of pocket for the buyer’s agent commission.  This makes the seller’s home more desirable to the buyer because they do not have to come up with the “hard cash” for the commission to close escrow. 

In my opinion, it is better for the seller to keep the door open, but not to commit to paying a buyer’s cooperating agent commission.  When an offer is presented, the buyer’s agent will submit an offer and most likely a Buyer Broker Compensation Agreement requesting a seller to pay the cooperating buyer’s agent a specific commission.   At that time,  the seller can counter the commission request by eliminating it or reducing it, just the way they have the option to counter the purchase offer itself.  The incentive to accept a buyer’s agent request for compensation really just depends on how much the seller NETS at close of escrow and what competing offers are requesting.  This simple approach of not committing to a buyer’s agent commission, but to be open to one, is keeping ALL options on the table for the home seller. By pursuing this strategy, it does not deter interest to prospective buyers and buyer’s agents,  as they will be made aware you are open to cooperating buyer’s compensation, depending on the terms, conditions and merits of the purchase offer itself.

Ultimately, it is entirely your decision as a home seller what you want to pay the buyer’s agent, if any commission at all.  For more details, please feel free to contact us at 916-567-4200.