So, I’m sure you’re willing to pay a Buyer’s agent a commission to bring you a qualified buyer to closing, right? And you probably think the going rate is something like 3%.
Well, 2.7% is what’s most often offered to Buyer’s Agents in the MLS. There is no set rate, and setting commission rates is against regulation.
I’m often asked, will it help if I offer a full 3%, or even 3.5%, since 2.7% is what the other listings in my area are offering?
My answer is usually NO. This is because, ultimately, the Buyers decide which house to buy, not the commission offered to the agent. Think of it from a salespersons perspective; most agents are going to go for the quickest most painless close, and that’s usually the house that the buyer’s like best. Getting an extra $300 to $900 doesn’t stand a chance against a ‘sure shot’!
Since 3.5% is not much more incentive for agents to persuade buyers, should you offer less than 2.7%?
You can, but in my opinion, it’s not a very good idea. Most feedback I receive from agents, on listings of my clients who offer less than 2.7% is, “I’ll only show this home if your buyers agree to 2.7%”. Technically, that’s illegal, and I in no way condone it… but it happens all the time.
My conclusion, and my recommendation, is to offer the commission that’s most often offered (2.7%), and try to appeal to buyers. Think home warranties, upgrades to the home, cleanliness, etc. Those are the things that will sell your home, and make buyers pick up the phone, call their agents to schedule a time to come see your home.
I’m sure you’re wondering why even offer a buyer agent commission then, if buyer’s ultimately make the decision. Well, because most buyers don’t have to pay agents a dime, and feel uncomfortable going at it alone… most buyers simply find a house, call their agent, see it, and let the agent handle the rest (particularly the paperwork).
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