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From a recent client convo….
Client… “Tom, we’re ok paying you to list our home but I hear, with the forthcoming changes, we don’t have to pay a buyer broker. Do we have the right to do this? Do you recommend it?”
Summary of my reply…
- the only real change is that we as agents can’t post the commission offered to a buyer broker when we list your home.
- YES you, as a seller, should absolutely pay a buyer broker and factor this into your sale.
- if you want a true industry pro, like any industry, you will need to compensate them accordingly. Aka - you get what you pay for.
My actual reply…
Morning. You have always had this ‘right’. Agents and agencies have and will offer all kinds of rates/fees/commissions to sell a property. From the beginning of the industry, there have been people/agencies that do different things and offer to perform them at various levels. From the ‘help you sell type’ agencies where you do the work, the discount / flat fee models to the full service and truly professional agencies that usually charge 5-6% (and in doing so typically split the commission with an agent bringing you a much needed/precious buyer) there are many models and flavors.
So, per your questions, sellers are ‘ok’ and free to choose who can best help them achieve their goals (usually selling for the highest price and under the best terms). There has never been an obligation for you to pay X% in commission or to pay a buyer broker.
The bigger question is should you and if you don’t what are the negative consequences? Like many things in life you get what you pay for - or in this case, you might not get what you’re not paying for. If you put the burden/cost of paying a buyer broker on the buyer you will have fewer buyers step forward (they now have to pay this vs wrap into the loan), if they do offer the number will be lower (they have to pay their agent so they will take this into consideration), it will lead to lingering on the market longer and ultimately selling at a lower price.
So, you may perceive that you’re saving 3% commission (by only paying your agent vs the buyer’s agent) but you will wind up in the same place, or much, much more likely, at a lower net amount in your pocket.
“Ok, so maybe the buyer won’t have an agent”. According to industry stats over 95% of all residential sales involve buyer brokers. Like the sale of a home - it’s just too complex and consequential to go it alone. So, that isn’t likely.
“OK, so what if they are a cash buyer? By some estimates, cash buyers make up as much as 10% of all transactions. Of course, this varies by location, price point, property type, age, and more. But, this doesn’t really help on the ‘saving money’ front. These more seasoned and sophisticated buyers know the value of having an agent on their side and nearly always have a buyer broker. If they pay them - they will pay you less. Since ~90% of all buyers aren’t cash buyers, this payment to their agent is a massive deterrent to them buying your home.
For over 100 years buyers have paid more for homes, so sellers could have the extra 5-6% to pay not only the listing agent but also the agent that brought them the buyer. This process has served all parties well and is in both the buyer's and seller's best interest.
There's a lot more to explore, and I'm eager to discuss it with you. Feel free to reach out at 207-775-0248 or email landryteam@benchmarkmaine.com.
