Pay a Buyer’s Agent
The Burning Question
In my last post, I covered recent changes in real estate rules. Now, sellers often ask, “Do I still need to pay a buyer’s agent?”
Saving Money Matters
We all want to save on big expenses, like selling a home. The fees can add up! It's somewhat simple to compare the services of a listing agent and determine the best value. However, the idea of cutting out a buyer's agent requires some analysis of the situation and an understanding of how homes are sold. Did you know we have marketing plans that could save you thousands when selling your home?
Buyer Agency Agreements
Agents are now legally required to have buyers sign an agreement before showing homes. This agreement outlines the agent’s commission if the buyer purchases. Often, the buyer asks the seller to pay this commission at closing. If the buyer can’t afford it, they may have to go without representation.
A Brief History of Commissions
When I started in real estate, we listed homes at a 7% commission—split evenly between the seller's and buyer's agents. Over time, rising demand and home prices led to increased competition among agents, and fees dropped. Until August 2024, most MLS listings offered a 3% cooperating commission. Many people now think this has dropped to 0%, but that’s not true.
What It Takes to Be a Buyer’s Agent
Buyer’s agents need income to cover expenses. They spend time, energy, and resources working with clients—sometimes for months or even years. They usually aren’t paid until the home sale closes. If sellers want access to a pool of ready buyers, they need to offer a competitive commission that reflects the agent’s hard work and expertise. This commission is often stated in the buyer’s agent agreement. Ultimately, the value buyers place on representation will determine how much the agent is paid.
Your Commission Offer
So, how much should you, the seller, offer to a buyer's agent? First, ask yourself these seven questions:
- Do I want to attract buyer’s agents or only unrepresented buyers?
- How much do buyer’s agents typically make on listings like mine?
- What’s the demand for my home right now?
- Am I willing to price my home competitively?
- Are buyers in my price range already contracted to pay their agent’s fee?
- Can buyers afford to pay their buyer's agent if I don’t?
- Will buyers offer less than market value if I don’t pay their agent?
An experienced agent can help you make the best decision. It’s smart to consider how attractive your listing is to buyer’s agents before going on the market.
No Buyer’s Agent Route
If you still aren't convinced that you should pay a buyer’s agent, look for my next post which will explore that option.