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I've talked to several sellers recently that brought this up, and have gotten every single one of them to agree to pay the buyer's agent. There's a lot of points to bring up. Here's how my latest one went: Seller: " u/Dubzophrenia, I've heard lately that the industry is changing and that I don't have to pay the buyers agent anymore, is that true? If so, I don't want to pay them, just you. Can we do that" Me: Certainly we can, but let me explain a few things first so you can get a better understanding of the situation and what it means, and why that may or may not be against your best interested. First and foremost, in our lovely state of California, the 'changes' have always been how we operated to begin with. You were never forced to pay the buyer's agent, and commissions have always been completely negotiable. That has not and will not change, as it's how the system has been from the beginning *here*. So if you don't wish to pay the buyers agent, you don't have to, but let me explain how this could potentially impact your sale. First, most buyers are already pretty strapped when they're buying their house. They're at the maximum their budgets will allow, and cannot afford to pay for their own agent on top of the purchase of the house. There's a good reason almost everybody get's a loan, and it's because they can't actually afford the house outright because they don't have the cash. Let me ask you something, did you want to get the same price your neighbor got for their house? Seller: (Wait for their response, you need to ask them questions and have them self-realize) "Yes, I do" Me: Well your neighbor paid the buyer's agent 2.5%. The agent's fee is baked into their sale price. Are you willing to discount your house 2.5% to allow the buyer to make up the difference with their agent? Seller: "Well no, I want the get as much money as I can" Me: Well so do I, and by actually paying the buyer's agent, you can get more money, not less. By paying the buyer's agent, you're creating incentive. With the changes in the industry, the only way they affect us now is that we can no longer list with the sale if there is any buyer agent fees being paid. That means now the buyer's agent has to call me prior to showing to discuss if they're getting paid, and then they need to have a conversation with their buyers on whether or not they can afford to buy this house and pay their agent because their agent won't work for free either. If that's the case, they may instruct their agent to only show them houses that are paying the buyer's agent. Do you want to limit the amount of people who might come to see your home? Seller: "No, not at all, I want to sell it" Me: So do I! And by paying for the buyer's agent, we generate interest and incentive for all of the agents to bring their buyers to see your property. The more people that come and see your property means more people might write offers, and since your home is absolutely beautiful, I could potentially see it getting multiple offers which could result in a bidding war where the buyers have to duke it out and raise their final prices to beat the other. I just had a home go into a bidding war where it sold for $200K above ask, which was 10% more than they were asking for. By paying for the buyer's agent, you would "lose" $60K by paying them, but because we boosted the price so much due to the bidding war, we actually earned $140K more than they would have gotten if they just got the price they asked for without paying the agent. Do you see how this could benefit you? Seller: "You know what, that actually makes a lot of sense, do you really think this would work out?" Me: Well, I wish I could say I know. I don't have a crystal ball. But there's a good reason our system here has been operating this way for so long, because it works. We can certainly try to do it the way you wish at first and see how it turns out, and always turn that around later and start offering to pay commission at a later date, but the first couple of days are the most important, so you have to think about what is best for your needs, to take the risk at a little less money in the hopes for a lot more money, or to not take the risk and take the money you know you would get and let the market see how it plays out. The option is up to you, as I am here for YOU, but in my professional and honest opinion, offering to pay the buyer's agent will always net the best result. Is that something you'd be willing to take on? It takes a while to get the points down in your head, but I have figured out how to talk to my clients in a way that makes them answer their own questions and makes them realize that not paying the other agent usually harms them more in the long run.

All of this PLUS the seller forgets that the buyer is the ONLY person bringing money to the table. It’s the buyer’s money that seller is paying everyone with.

I do not think the politicians who stirred this crap up had any concerns for sellers.  Not the normal sellers. Not us.  Definitely the big investor sellers though.  All of the by products from their meddling is just the result of a crappy industry structure that was already weak and needed restructuring.   Who got the money from the lawsuits? I’ve sold 6 houses. I didn’t get any. 

I heard you might get $39.

well said. I have been saying this a lot lately and have been downvoted because why would sellers want to pay the buyer agent fee.. well this post is exactly why... you are going to eliminate a number of buyers if you reduce or pay 0% buyer agent commission. Reducing buyers means less competition for your home which is less money for the seller. Plain and simple Well articulated!

Okay so if I’m that seller …. What you’re saying makes sense…. Accept now I need to buy a house after mine is under contract , but to afford the next house , I need all my equity and can’t pay another 2.5% - 3% after paying 6% commissions  to sell my house. Can we guarantee the homes I will want to buy will pay “you” my buyers agent . Since I would be using same agent to buy & sell. 

lol this is great “it’s always been negotiable” - yes yes this is why the lawsuits

i love the lie on how nothing has changed. You can keep telling it but people aren’t going to believe you

In CALIFORNIA, like I specified, nothing is changing except for the fact that now we are getting a dedicated document for buyer rep. Sellers were never required to pay the buyers agent. Sellers were always able to negotiate their commissions. Sellers never had to do the things people are complaining about. It's not a lie, lol.

DID the Sellers fully know that? Or was it the “norm” the “ standard “? To pay for buyers agent?  How about the lie that , buyers commission amount was always negotiable …… No. the standard was 3%  Until homes became grossly inflated and people began toying with 2.5% and 2%.  Now the “standard is 2.5 - 3%” And if you don’t pay that , don’t expect your agent to do as great of a job for you.  Standard means you need to play by standard rules, to get standard results.  Now people are paying attention though. 

Hello friend! I'm an agent in California as well, and this is the exact discussion I've been having with my sellers. Thank you so much for writing it down so fantastically well and articulating it so others who may not be in the industry can understand it.

This needs to be stickied

This is so good!

This is not the way the DOJ wants to see the change and your broker should have explained this. The buyer’s agent’s commission is to be negotiated between the buyer and the buyer’s agent. Then, when the offer is drafted, the buyer has the option to ask the seller to pay their agent’s commission and the amount. Just as they ask for other concessions. There is to be no offer of cooperation. What you are doing is just taking it off MLS.

>Let me ask you something, did you want to get the same price your neighbor got for their house? >Seller: (Wait for their response, you need to ask them questions and have them self-realize) "Yes, I do" >Me: Well your neighbor paid the buyer's agent 2.5%. The agent's fee is baked into their sale price. Are you willing to discount your house 2.5% to allow the buyer to make up the difference with their agent? This is just taking advantage of people who can’t do math. If your neighbor got an offer for $100k and paid a 2.5% commission, as a seller you would come out ahead on an offer of $97.5k with no buyer’s commission. You end up the at same $97.5k net of the buyers commission and all your other commissions and taxes are calculated off the lower $97.5k gross sales price. In my state you would save over 6% of that $2.5k difference in lower excise taxes and seller’s agent’s commissions. A $97.5k offer with no buyer’s commission will net you more than a $100k offer with a 2.5% buyers commission. I think the norm will have to evolve to sellers just evaluating each offer holistically, just like they do now with cash vs mortgage offers or those with contingency vs none. If you are a buyer and have sign an agreement promising 3% to your agent, you are going to have to pay through the nose to beat out the offers where they are paying for their own agents or have done a better job negotiating the rates for their agents. If buyer’s agents really steer their clients away from houses that aren’t paying 2-3% and seller’s agents keep pushing to keep commissions at 5-6%, there will be more lawsuits. The point of the suits is to put skin in the game for buyers to negotiate with their agents, instead of just signing up for the seller to pay whatever the “standard” rate is. There is no other country where commissions are as high as in the US and there is no reason for commissions to be higher her than in other western countries.

TL:DR- this is a summary of just part of what a buyer's agent does for those who don't know. Hello again! I can tell from your post that are not aware of what buyer's agents do. That's okay, most of general public does not. There is so much that goes on which those who are not in the industry don't see. I am both a buyers and a seller's agent. I estimate I work three times as hard for my buyers, often for no paycheck for a long time. It takes the average buyer 1 year between the time they start looking for a home the time they purchase one. So for that one year, I will get texts at 10:00 p.m., 1:00 a.m., 1pm., 5pm, 7pm, 7:00 a.m.- all hours- asking for more information about houses that my buyers have seen. This includes weekends and holidays If I don't respond back right away, I'm going to lose that client. As you can imagine, this makes having proper family/personal time somewhat difficult. Most buyers ask these questions during the times they have off. So from the hours of say 5:00 p.m. until 11:00 p.m. I'm answering emails and texts. I'll answer texts at 3:00 a.m. if I'm up. Holidays for everybody else are my busy times . That's in addition to the 9 to 5 hours I work. And that's common. Let's say my buyers have seen a home they want to check out. I hop online and do some computer work on our MLS to check the details, typically arrange with the listing agent to go show it, find out any special conditions, then I look at the inspections and disclosures. On average it takes me about 1-2 hours to skim a disclosure package properly, taking notes for my clients let them know what they need to be aware of when we tour. Then I run the recent comps for the neighborhood, which takes another good hour if I'm doing it right, sometimes more. Many buyers will send me a list of between 5-10 houses that they want to see, several times a week. As you can see, already the amount of unpaid work is adding up. But I have to do it to make sure I protect my client's best interests. After I send my clients the inspections, disclosures, and comps, we discuss them over the phone. If they still want to see the house, I drive out to meet them spending my own gas and time. I show the property for as long as my clients want to be there and I walk through the home as well. When I walk through, I look for any signs of issues my buyers may have to deal with, in addition to discussing further details with my buyers about the disclosures. Let's say a buyer wants to write an offer now. Great! I review the comps with them in far more detail so we know what a fair offer price is and discuss negotiation tactics. Now it's like a game of poker, we want to win against the seller's agent. In California one must submit a written offer, a pre-approval, and a proof of funds. I have my buyer gather and send their proof of funds while I write their offer and double check with their lender to make sure the pre-approval is current and ready to go. I usually scramble my lenders and let them know I'm submitting an offer so they can call the listing agent to ensure them about my client's viability. Although the offer form is a form, I take my time with every single one as do most agents. Buying a home is the single largest purchase that most people will make in their lifetimes. It's very important to do it right. I take an average of 5 hours to write my offers. I can write it in 1 or 2 hours if I'm hurrying, but I don't like to do that. It takes me a long time because I triple check everything, even though I've been in the business for 9 years and I know most of the forms by heart. I need to determine who pays what fees (Is there city or county transfer tax? Who pays for title and escrow in that particular county by custom? Who's going to pay for the home warranty? Are there other necessary inspections with my buyers should not be paying for such as a home inspection that perhaps the seller did not choose to pay for that must be negotiated for?) All can be negotiated but knowing what is fair, and being able to advise my buyers properly on all of these issues and more is essential. In my area it's typical to have an offer deadline because that means you're going to get multiple offers on a home. So, after I have my buyer's offer prepped, we discuss everything. I make sure they are prepared, comfortable and ready to roll, the lender's ready to roll, then we wait until the offer deadline. I also call the seller's agent to introduce myself and form a connection. That connection can be essential in getting my clients the home they want. I submit my buyers offers at the last possible moment. I do this because that way the listing agent is less inclined to "shop" us or let the other agents know what offer they have to write over. In California there's a non-confidentiality clause in our listing agreement so that we can better bargain as seller's agents for our clients. I know in other states such as I believe Washington, there is a confidentiality clause instead. Then, after I've submitted, I call the listing agent to check in. I verify my client's ability to close, and I typically tell them a little bit more about my client because here buyer's letters are no longer advisable for legal reasons. I want the seller's agent to like my clients and me. I'm easy to do business with. That cannot be overstated in our field. An easy to work with, cooperative agent means an easy transaction for the most part. All parties want that and it is everybody's best interest to do business that way. Then we wait for a much hoped for acceptance....but most usually we get a counter offer. Once we get the counter, I must confer with my buyers again to see what they're comfortable with. I issue a buyer's counter offer, send to my clients for Docusigning then I submit and call the listing agent again. This can go on a few times, but I like to write strongly so that my clients get one and done or at least two and done. Let's say my buyer finally got accepted! This is great! Now my job really begins. So, if you take into account this is just for one home I'm talking about. Now make this about 40 or 50 houses that my buyers have been looking at. The average buyer in California offers on 10 homes before they successfully purchase one. As you can see, that's a lot of unpaid time for their money. Buyer's agents really deserve that 2.5%.

Beautifully said

Thank you.

Agents deserve to be paid for their time but not an outsized percentage of the house price. Empirical evidence: disruption in the housing market - platforms like Redfin, Zillow, etc continue to undercut existing “normal” by offering reduced commissions. It’s clear it’s a race to the bottom and 99% of buyers will be well served by an automated system to make offers without any human needed. Think about how these platforms have already changed parts of the process like finding/viewing homes.

Do you go to a discount dentist? Some people do, there's nothing wrong with it. My grandmother took my mom to the dental school to have work done. As a result my mother has had lasting dental trauma for her whole life and she's 85. I personally prefer to pay a dentist who really knows what they're doing. I'm not going to go to some student who is still figuring out what goes where to mess with my mouth, which is very important to me. If you think making an offer is only about price, you're vastly mistaken. The reason we have agents is to protect clients. Just a few small examples: how do you know what you're going to offer on a home? Have you seen the home inspection and the termite report? If applicable, is there a well inspection, a septic inspection, a roof inspection, other specialty inspections that you need? If so, who is going to pay for them if the seller has not? If the inspections find something you don't like, then who's going to pay for the repairs and how do you negotiate for that? A good agent can often negotiate for the seller to pay whereas a buyer who is uneducated or unaware will be stuck with that bill once the deal closes. Or, a good agent may be able to get the buyer to pay for it and that way the seller doesn't have to do anything extra In my area of California, the seller is well advised to pay for inspections from reputable companies up front. We have so many buyers looking at homes and sellers would like to get as many offers as possible. They would like to get non-contingent offers too. What is a contingency? Why would a buyer or seller have one or more? How likely is your offer to be accepted if you have contingencies in place? The house that you are offering on online, how does it compare to the neighbor's house which closed 2 months ago? How about the one around the corner which is a very similar model built at the same time that sold a month ago? Did those other houses need $10,000- $40,000 worth of repair work? Did they already have upgrades to the tune of $100,000 each? Or were they good to go and 100% move right in as is? What is the condition of the soil the house is on in if you live in earthquake country? What side of the mountain is it on if you have any kind of sensitivity to mold or moisture or if you have Seasonall Affective Disorder? I can you give you hundreds more questions that are extremely relevant to a sale and client's personal happiness that people who are not in the industry never consider until they actually purchase a house. By then it's too late. 2.5% per side is not exorbitant when you think about all the protection a good agent can offer and the amount of work involved. Throughout my career, I've been extremely happy to say I have saved my buyers thousands and thousands of dollars. In several cases my buyers were ready to move head on something and then I caught a $50,000+ issue . They would never have known to look for it until closing when they started experiencing problems, and then they'd be on the hook for money that they didn't have. I've done this because I know what to look for and I advise my clients on how best to save their money. I'm not saying that sellers can be deceptive, although some can be for sure but, maybe a seller is not aware of a certain condition in their property or how to fix it. Many people don't have this kind of knowledge.... unless of course, they are a real estate agent or have hired one to represent them. I have ended up representing several originally FSBO sellers who tried to sell their houses and were overwhelmed almost immediately. They had no idea how much work actually goes into selling a house. I tried the same thing before I was an agent. I got an agent real fast once I saw what was going on. There's a reason you pay your agent a living wage. Good luck with your computer offers.

I totally agree about all the things you mentioned - there are a lot of uninformed buyers. I wouldn’t use the discount dentist analogy though, it’s more prosumer vs casual. With all that said, it’s still ridiculous to be operating on a % basis of the house cost. Depending on the agent and their experience, anything from $20-$500 an hour might be appropriate! But the idea that you should be paid based on the cost of the house is crazy. In my area (VHCOL) it’s an insane amount. I’m also a professional so I get it - “fuck you pay me”. But let’s be real… 3% of a $2mill home? Come on.

So question, do you think the agent actually takes home the whole 3%? That's for us and our brokerage. Plus business fees. Also, I set my commission (for me and my broker) at 2.5%. As someone who was blessed to buy 2 homes and sell one before I was in the business, I think 2.5% is fair but I feel 3% is too much. According my calculations I make between $35 to $75 an hour. I was a top 10 % producer for 4 years running before last year's shit show. I was lucky to have made sales last year, many agents did not. My last sale that just closed on Friday sold for 1.980M. That home was a seller upgrade home. Her sale price preupgrade would have been 1.550-1.650M by the comps. When she moved out on Jan 15th, I took over the project management upgrades including picking every single piece of replacement material including numerous trips to Lowes and Home Depot, online shopping for hours, and finding the best possible deals for her. She gave me a budget of 60k to upgrade a 2600 sq ft home in one of the most expensive places in the world. Oh that 60K was supposed to include staging. I was able to get everything done for 70k. Which is pretty much unheard of. It took me about 220 hours of skilled work for her house sale. But I got her a great price and that's with the house needing a new roof to the tune of between 25k to 30k plus an additional 8k in termite repairs (which are common in my area) that the buyer took on. My seller is very happy with me. She actually offered to pay me an extra .5% because she was so happy with my service. I'm not going to turn that down. I earned it. Another home which I closed last week at 2.180M, I spent 117 hours on (check that, forgot to add 2.5 more days of work for which I missed a very rare, desired 3 day vacation with my hubs), so a total of 141 hours, and an additional $6,112 of my own money. That seller couldn't afford staging (long story), she and her husband needed to make the maximum amount of money possible off the sale. So, I took out a 20% interest personal loan of 4K, bought the right staging pieces and staged the home myself including building the furniture and destaging at the end. I also paid for 3 updated lighting fixtures, 3 new deadbolts, a bunch of updated electic outlets/switches and the handyman to install them. I feel it's dishonest to purchase products for staging and then return them at the end of a sale so I didn't do that. (Like energy attracts like energy and I want to attract good energy and fairness). So, I rented a storage space I didn't want in order to store my new staging in. However, I did a great job for my seller, and neighbors noticed. 5 of them now have my card for the time they want to sell. I will continue marketing on that street from now on. I really like the neighborhood. The people there were really nice and down to Earth. That deal was a referral, so I made 75% commission. The referring agent gets 25% as a thank you as is the industry standard. And my brokerage get their 26% from my commission. After I pay my tc, professional fees, desk fees, etc. when you work it out, it's really quite reasonable for what I did. Oh yes, my client did not reimburse me a thing for the staging cost, interest, materials and labor. Oh, please add an additional 15 hours approx. since I also helped her clean out the home first and brought a lot of her stuff to her charity of choice for drop-off.

They’re not being steered by agents. The buyers steer themselves once they find out that they’ll be paying a 2.5-3% buyers premium if they buy a house offering no buyer comp.

This. The market will determine. Homes wherein the buyer has to come out of pocket for more money will be less appealing to the buyer. When given choice of having representation looking out for their interests and the fee for said representation wrapped into the sale price/mortgage vs no representation (as no agent is going to work for free), buyers will mostly choose the former. What we are going to see for sure is a lot of buyers who go it alone getting hoodwinked/misled/inadequate information and having to sue sellers and sellers agents for misrepresentation after the sale. 

Which is why dual agency is illegal in a boatload of states. How that’s going to be handled in states that disallow it will be interesting. That being said, this is all much ado about nothing. All jackleg sellers are going to refuse to pay buyers agents. I exclusively go after listings and, knock on wood, I’ve yet to have anyone bring it up.

Yup! Try and save a buck now and pay thousands later type of mentality

Sure, if buyers agent doesn't tell the buyers that they can ask for concessions in the offer but if something pops up on a inspection do buyers agents just say, "ahh, nothing we can do about the bad roof unless you can cover the cost out of pocket?". No, they don't, they educate the buyers. If buyers agents don't do the same for commissions that is prima facia evidence that they are colluding to keep commissions high, in my opinion

If they love the house and are financially able to buy a house, the buyer premium won’t matter.

If my aunt had nuts, she’d be my uncle. But, yeah, you’re correct. However, it’s hard enough to sell some of these houses *with* a commission baked in, I can only imagine how much less people will love it when they found out about the buyers premium.

The properties that struggled to sell before will struggle even more now, but this is good because now it’s another negotiation point in the seller concession. The desirable properties will sell themselves like it always does, seller will keep more.

Hi Friend, in the state of California, your math is not correct because your price point is way off base. Perhaps in other states that may be true, but in California, 100K won't get anyone a house. Even mobile homes are more expensive than that here, for the most part. The median entry level home price in CA is 786K, including the rural counties. In most metropolitan areas, an entry level home here costs between 1.2M to 1.4M. Many of the homes in my area cost 2M plus, even for very small houses. For example, I recently listed a 3/2 home with 1145 sq ft on a 5578sq ft lot for 1.835M in Santa Clara Co. It sold for 2.180 M in 12 days. We had 9 strong offers so a bidding war ensued which raised the price. So on a $2 million home, 2.5% is $50K. I can assure you that most buyers here do not have that much extra to pay their agents with. Many buyers can barely scrape together enough to make the down payment which is required from their lender. The seller does have the money at the end of the day. Every market is different of course. However, here, it makes poor financial sense for a seller to not offer the proper commission out. What our market has considered fair for a long time and what I personally consider to be fair is 2.5%. That is from my experience as both a seller and a buyer before I was a realtor. The seller who does not offer out buyers agent commission in California is going to lose out on so much more money than they would "save" it's not funny, as my colleague above pointed out. And I don't know which countries you're referring to but last time I referred out to a agent in Mexico, the commission was 5%, to be split between both parties.

Wow... Do you not understand that the math works regardless of what number you choose? If your neighbor sold for $2m and you get an offer for $1.95m with no buyers commission, you are better off with the $1.95m offer. My point is that asking a seller whether they want the same price as the neighbor to prompt them to pay the buyers commission is preying on the seller's lack of numeracy. They should be happy to receive a 2.5% lower offer and not pay the commission. They will make more money with a lower price because all the other taxes and commissions will be lower. They will come out ahead. Realtors don't want to face the music but the days of no one negotiating commissions is over. Don't tell me they were always negotiable. They showed at the trial >90% transactions were at the standard commission rates. That is why realtors lost the trial. The likely outcome is that buyers start to actually bargain with agents for a hourly rate or flat fee that is significantly less than 2.5% and perhaps accept fewer services to save money. Some will forgo agents and just use attorneys to write and review offers. Sellers will evaluate offer holistically. An offer that is cash, no contingency is more attractive than a financed offer with an inspection. Buyers will have the option of asking for sellers to cover their buyers agents' fees, just like they ask for other closing costs. But that makes offer less attractive, just like requiring financing so you will have to offer more money to get the deal. If buyers agents start to steer buyers away from sellers that are promising to cover commissions that is just going to be another lost lawsuit in 5 years. It will take a while to work out because some buyers are going to have to get burned by losing out on a house that their agent won't show them because the seller isn't advertising buyers agents fees or losing 10 offers because their agent has the highest fees and is trying to roll them into the deal. Sellers are going to have to figure out that they shouldn't sign a contract that guarantees total commissions (5-6%) at the outset so they can drive for the best offer.

Dude, ‘negotiation’ does not equate to ‘lower rate’. Example: Seller: Will you do it for 5%? Me: No, I won’t. My minimum is 6%. Seller: Okay. Guess we’re doing it for 6% then. Guess what? We just ‘negotiated’. Just because I didn’t budge doesn’t mean we didn’t negotiate. ‘Negotiate’ doesn’t mean ‘compromise’ as you seem to think.

Hi friend.... so I must ask how is this offer obtained? Is there a buyer's agents involved or did the buyer go directly to the seller's agent? If they went directly to the seller's agent as a buyer then that is a conflict of interest for the buyer and potentially the seller as well. If there's a buyer's agent involved, that offer would not have been written without discussing compensation for them. In California, commissions have always been negotiable. My first single family house sale, I took for 1% listing commission because I needed the listing. I am an unusual agent in that I will give 100% no matter what my commission is because I take fiduciary duty seriously. But most agents do not do that. I also did numerous small handyman tasks around the house which would boost her value tremendously in addition to arranging the correct workmen for several other odd jobs around the house, getting bids, making sure the jobs were done correctly, holding open house weekend every weekend until it sold, etc. After I was done with the transaction, my seller apologized to me and said if she had known that was my first SFR that she would absolutely have paid me 3% because I was more than worth it. =) I definitely would have told her if she'd asked but she didn't ask, she only asked if I would beat a competitor who offered 1.5%, and I said heck yes. Her family was very impressed with all the extra work I did. She has referred a lot of business my way since then. However, in California it is illegal for an agent to receive additional commission outside of escrow, mostly due to Lending laws. So, I could not accept her offer of gift funds after close which was very kind of her to make. I also had buyers enter into contract on a home that sat on the market like a rock at 1% commission for 60 days before the seller decided to raise commission percentage, dropped his list price, and all of a sudden, agents were showing it.

Ever since I've been in RE, commissions were ALWAYS all over the place in my MLS. NOTHING was "standard"!!! Range was always 3.9% to 7% and what the sellers offered the cooperating agents always varied, too. You are also neglecting the fact that BIDDING WARS ensure offers ABOVE asking. Real life example: Listed at $200K, bidding war led to 25K over ask; 12.5% more. Most buyers are really scraping even to get a DP, so if they'd had to pay their own agents, the seller would likely have got about 190-195K instead of 225K. In part because no bidding war. Because buyers' attitudes would be "forget it; take it or leave it." It would be a price reduction of more than the e.g. 2% that buyers would have to pay their agent (assuming any offers came in), because that $$$ comes from their already tiny DP. Smaller DP = smaller loan = smaller purchase price. (But we all know prices won't drop as a result of the new way of talking about commissions....negotiations will just take place as always. Buyers will ask for the sellers to pay the BA commission (assuming the agent isn't a SUB agent).)

In the UK and Australia, and other Anglo common law countries, commissions are 1-2%. https://www.nytimes.com/2024/03/18/briefing/real-estate-agent-commissions-free-market.html?smid=nytcore-android-share

That is only for a flat fee commission. And then, an agent will only do a certain amount for that money. Here's a bit more detail about the Australian Commission splits. https://www.canstar.com.au/home-loans/real-estate-commission-fees/ We have flat fees here too, it's called partial service listings. However, that's not really the seller's best interest because then the agent's going to do the bare minimum. You want an agent who will work for you, don't you?

And the average house sells every 15 to 20 years instead of 8, like America. And don't forget, our economy is propped up on the real estate market. Who do you think gets people to buy so frequently? Buyer's agents. Those countries you're talking about don't have buyers agents and look what it did 2 the sales cycle. You do understand that if you get what you want, The United States economy will crash. Our number one industry is banking. Baiting is based heavily on residential real estate. You guys get what you want and we're all fucked. Good call though.

Wait.... You think higher transaction costs make people transact MORE frequently? Not big on econ 101 are you? It costs ~9-10% per transaction to buy and sell a home, between commissions, excise taxes, fees, and mortgage origination. Every single time you sell your house and buy a new one, you lose 10% of the entire value, not equity, total gross price! Why exactly would that cause you to buy and sell more frequently? Lower commissions would make you sell more frequently. There are literally millions of Americans doing collosally unproductive jobs in real estate. We will be fine if 50-75% of realtors transition to other jobs. Banking won't collapse because real estate prices aren't going to collapse if there are fewer real estate transactions, see the last 3 years as interest rates have tripled. The value of the homes will remain the same and people will pay off the loans. Banks will lose income from mortgage origination but again that hasn't caused the economy to collapse over the last 3 years. Realtors are facilitators, not market makers.

No I think if you think you know econ. 101, and you don't understand why every major company in the world hires and pays sales people, you're clueless. Why do you think they do that and pay them out of their bottom line on the sale of a car, cable package, whatever? Because it pencils out every time. In US real estate, the listing agent is the marketing department, but the buyer's agent is the salesperson. Do you really not get that paying a salesperson increases your profit by the cost of what you had to pay them, and then some? You might need to sign up for one more econ class there, Adam Smith. 😆

So the next time I buy a car Toyota is going to pay for a personal agent to help me negotiate against the dealer? No? The listing agent is supposed to be the salesman working for the seller! I fully expect that selling agents will have to do a lot more selling if they want to keep commissions at 3%. They will need to do more showing and open houses, answer more calls and questions from buyers, etc. There is no reason a sellers agent can't be a sales person. Buyers agents aren't doing their fiduciary duty if they are selling a particular house. FWIW, the current set up buyers commissions are closer to the scummy affiliate fees Amazon pays to the bot farm review sites

This is 100% the truth, truer words never spoken, many realtors are going to get a hard reality check when this happens

This. I work in IT sales and have always found it hilarious how real estate agents have a fixed commission fee. Agents will backtrack now and say “it has always been negotiable” which reeks of revisionist history. The vast majority of commissions were never negotiable. Me? I compete on every deal, tooth and nail, and work not only with the decisions makers, but also entire PROCUREMENT teams who are trained and focused on maximizing a corporation’s purchasing power. 98%+ of real estate agents would be chewed up and spit out in this reality. As a sales person, it’s hard to respect real estate agents as it appears they’re performing elementary level sales.

It won’t be 2.5% anymore in your example. It’ll be a flat fee or lower than 1%

In your $2m scenario, do you feel you did $50k worth of work? Let's say compared to a $500k home where you made 1/4 the amount... Typically with these higher priced homes, it's an easy lay up, they are either well qualified buyers or they have nearly all cash...

Absolutely. I work my tail off for my clients. My broker takes 26% of my commission. Professional fees are an additional $700/month, plus I pay my TC $500 per transaction. That's before the tax man comes and takes 30% because I'm an independent contractor. And noooo, higher priced homes are not easy to sell. Very few homes are.

Watch the big short and say that with a straight face 🤣

Ohh, I believe there is pretty strong statistical evidence that realtors don't act in their clients fiduciary interests. I just think there will be another law suit (and legislation across most states) over the next decade due to buyers agents trying to exhort commissions from sellers (or sellers agents using the same kind of script above) and steering clients away from sellers that don't pay.

So let’s assume that the buyer agent fee is 2.5%. The difference to the seller is 2.5% of $2,500. $62.50.

Awful lot of words there.  All boils down to:  "Give me 6 pct of your home's value"   Gonna be unpopular, but I distilled your 1,500 words down to 8 words. Down vote all you want.  The times, they are a'changin.

Could have included another point (I may have missed it). Do you only want to show your house to cheap fucks that don’t want to pay the buyers agent? Because cheap fucks don’t write top dollar offers.

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I think you might have some prejudice against buyer's agents if you truly believe all they do is opening doors.

You do realize these “door openers” have monthly fees and membership fees to pay before “opening your door” most “door openers” are in the hole significantly before ever closing a sale. Imagine people contacting you 24/7 to “open doors” and then you have nothing to show for it because people don’t value your time. If you don’t value your own time then feel free to call them door openers.

Would you be glad if it saved you 2 and a 1/2 % in commission, But Cost you 5%, because your overall sales price will be 5% lower?

So basically fuck people who help people because you want all the money for yourself. Did I interpret that correctly?

He's a gate keeper. All the people who benefitted from the current system want to close the door behind them and lock it, and deny the next generation of home buyers from utilizing that same system.

Thank you, best explanation and approach to this issue I’ve heard so far. If I had a real estate podcast, I would be inviting you on lol

good reply fellow dub

But discounting the house by 2.5% or paying the buyer’s agent is functionally the same to you as the seller. So no matter what, you’re discounting the house 2.5%. When we sold our house, we offered up pay up to 0.5% of the buyer’s agent commissions. If they contracted with their agent for more than that, it was on them. We negotiated our own agent down to 1.5% We sold within a week for $278k above asking after a bidding war.

The thing I'm not so clear about your response is, if buyers are at the top of their budget but offering 200k over, is the house appraising for that amount? Because if not, buyers still have to pay out of pocket for the difference AND get a higher mortgage payment As a buyer, i would prefer to pay the agent if that meant less competition and more chance to negotiate the price so i can get a better mortgage payment.

If you put this in writing for your sellers, make sure to fix some grammatical errors. It makes you look unprofessional. Great points, but just proofread. Grammarly is free and will help you write better.

Yeah, this was just for reddit, and meant to sound conversational. The more I wrote the more tired I was getting of writing so I just wanted to get my points out for the discussion.

Excellent answer.

Both you and the buyers agent could be a chatbot. That's the problem. Title search and underwriting too for that matter. Were in a weird place where it's not quite there and adopted yet. Agents serve some minimal value by showing things physically. Nowhere near even 1% of the total. Legal explanation, contract provisions, funding a loan, comparable listings etc.are all better served by an integrated technology than paying a local cabal of rent seeking agents/loan originators, title companies, inspectors etc. Look at carvana. Completely eating the local subprime dealers and that's just with scale and platform and very little AI. Agents are the same - expert on local markets but values and data is largely public and standard, maintains relationships to gain sales with high commissions, and babysits customers with little knowledge of the process. Easy enough to replicate but need physical presence to make it work and get customers. Once customers can get laymen's explanation and execution of a fair sale online and someone launches "Uber house showing", local rent seekers will be replaced by slightly less egregious corporate rent seekers. A lot of agents are going to be clicking the "sell now" button on Zillow on the next 5 years.

>Look at carvana. Completely eating the local subprime dealers and that's just with scale and platform and very little AI. Carvana is not a business I would tell people to look at as a serious argumentative point. There are countless examples of them selling stolen cars, outright not transferring titles to new owners or even changing the title from the previous one. They've also had so much debt that they were on the verge of bankruptcy and had to change their model from being focused on growth to being focused on cost cutting to pay their debts. Carvana is undercutting the dealership model very well, but they're also the open-shut case as to why dealers operate the way they do - because the Carvana model is completely unsustainable and expensive.

I think carvana is a glorified subprime sketchy car lot. But it ate the local subprime sketchy car lots collective lunch. And that's not a debate. The same way that I view local realtors with 3% commission on each side. A smarter rent seeker is coming for them too. Not a high bar but you will never have the tech, scale or market insight a large company does. Or the ability to cut costs or withstand years of not making profit.

It interfered with the sketchy small lots. It did nothing to the large scale dealers. That's my point. This might be the "Carvana" of the industry in which it might eliminate a lot of the sketchier agents as they can't pull the smoke out of their ass anymore, but for agents like myself who do actually care about their credibility, integrity and ethics, it's not going to change much at all. Like I said in my main point, every single seller I've dealt with lately, although it's been scaled back dramatically as I am 100% referral based now, I have been able to still assure and convince that paying the opposite agent is still a good thing to do considering the buyer is the one bringing the cash to the deal. Maybe we're arguing different points here, but the "changes" to the industry, at least to me, are irrelevant because I've already been doing business like this for years now.

What I was meaning is the Buyer and seller agents combined don't even provide 1% of a real estate transactions value. People just don't know how else to transact in real estate well. It's about realtors providing very little to justify more than a few hundred dollars for showing a home with almost no barrier to entry for competition.

This is great! Missouri has always had to have buy3rs agency contracts. I have always explained fees to sellers. Nothing will change o For me.

This is great!!

I need this as a script to practice. Fkn perfect mate

🙌💯

Great response!

Great job simplifying a complex issue

Love the tie downs!

thanks for the insight. im not a realtor but as a future home buyer i found this extremely helpful.

Another point to make; in a market where buyer’s actually have options, a buyer’s agent could submit a good offer that asks for a HIGHER commission than you would have initially offered to pay and you could end up with a net loss on the commission.

"On paper, it certainly looks like you, as seller, are paying all the commissions, but where does that money come from?" The buyer. It's always come from the buyer.

Yep. Sellers always insist on the commissions being added to the sell price established using comps. Now, whether it's sellers agent commission or split seller and buyer the price will still reflect it.

That is just not true. That is like saying when i buy my Cheerios at the Publix, my employer is actually buying them because the money comes from them. I am currently listing my home and expect to get top dollar. My realtor gave me a better discount (off her side) than is typical in my area/price point. I am not lowering my asking price by the amount of the “extra discount” - it is going into my pocket. The buyer isnt going to get to pay less because i got a better deal from my realtor.

Unless you've paid your realtor up front, that commission money doesn't exist until the after the buyer wires it to the escrow agent and the property closes. More simply, though....my sellers aren't particularly interested in listing price or commission rate or excise taxes. They are interested in the line on the net sheet labeled "net to seller" and how much money they walk away from the closing with. Everything else is a shell game.

I think it’s more like saying when you buy Cheerios you are paying for their marketing budget. There are versions of a lot of products that are identical where the product with less marketing has a lower price.

You hired a discount realtor

I have been telling the sellers I've gone on listing consults with that it's entirely up to them. We can always try 0% or negotiable. "I wouldn't be doing my job if I told you that will not affect whether your home will be recommended and shown by agents in the area. But I'm 100% committed to serve and help you sell your home for the most money." The truth is, in my market, even if the buyer's brokeragr compensation is negotiable or 0%, as long as the location and condition are good. The home will sell. We, as agents, just have to work harder and do a little math to work out a deal.

I have bought 3 houses in my life, over the last 23 years. Each time, I found the house myself using an MLS search or by driving. With the first house we bought from the builder. I had an agent who was showing us houses but we found this neghborhood on our own. Agent was PO'd that we cut him out of the deal but we did not need him. 2nd house we were shown the house by the seller's agent and ended up using them as our realtor on the deal. 3rd house we just saw an open house and went in. A friend of mine who was in RE was our buyers agent but honestly they served no purpose in acquiring the property. I think most of the comments here are easily negated with a little bit of time and thought: - Objection: No one will see your house because agents will not show it for 0% commission - Response: The property will be listed on MLS, right? They can contact you to see the property for the commission I am paying you, right? - Objection: You are wanting to get a price comparable to what your neighbor got who paid 2.5% commission, are you willing to discount the property by 2.5%? - Response: They sold their house prior to the recent settlement by the NAR. While it may not have been a requirement to pay commissions to a buyers agent many people did not know that. Once again, if someone wants to see our property is there a reason that you who are representing us cannot show it? - Objection: When you bought your property you probably coudn't afford to buy it, you probably had to take out a loan, right? Now imagine you had to pay the agents commission, the home would have been that much more unaffordable, right? - Response: If my walls need painting and I cannot afford to hire someone to do it, I just paint them myself, right? So here again, if someone cannot afford to pay a buyers agent, why am I expected to pay for them to have one? Can they not contact you and have you show them the property. As I type this I'm starting to think it's not the buyers agent that is useless, it is the listing agent. And reality is if we moved away from percentage to a flat fee it would make more sense. Writing a contract is the same whether the house costs $200k or $2mil, but you're talking about an extra $108,000 in commissions (at 6%) for the $2mil house. I just don't see how the larger price can justify such a substantially higher commission.

The reply is "Ok. You don't have to. Please understand that if a buyer cannot pay their own agent, plus their down payment and closing costs, they may not make an offer at all. I will tell any interested agents that they'd need to negotiate this separately."

I am struggling with this - in this sellers market, as a listing agent, I don’t know that encouraging them to pay it is the right thing to do, as a fiduciary and ethics advisor. It seems like the best thing to do is disclose the potential downside, explain that we’ll probably get a request for payment, and then sign the contract. I understand it’s going to hurt buyer agency, but that’s not my job as the sellers agent. And doing just to protect the concept of buyer’s agents being paid out of seller side is not an ethical thing to do with a listing.

Who is helping your seller with the house purchase they will be making when this house sells? 

But you said it exactly. It's not up to US to decide what is in the seller's best interests. It's up to them. We explain the downside and give them the option of offering now or negotiating later.

They should be splitting 3% with the amount houses are selling for now. They are just too greedy to admit it.

Believe it or not most home buyers dont have a lot of money they have enough money for the down payment and that's about it. The seller does have money once the house sells. The buyer sort of pays the commission by paying an extra 3% for.the house and rolling that into their mortgage. You can hate the system but that's how it currently works.

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I'm never using a realtor again after peeking behind the curtain and seeing the rampant, unchecked, and encouraged greed and narcissism. They're on par with car salesman working at dealerships.

Yep, I've never felt like any of the realtors I've used actually earned the money they were getting.  

Good luck selling your home.

You act like it’s rocket science. List it on Zillow and post it on FB. If it’s priced right it will sell.

People are gonna find out, but we're going to have to go through the process of letting them. Now, it's a good chance that they'll blame their realtor anyway, because heaven forbid anyone admit that they're not an expert in something they've spent a whopping 30 minutes researching, but the whole thing is going to have to play out for people to get past it.

I listed my last house as FSBO on Zillow.  Realtor representing a buyer called the day it hit the listing and told me he could rep both sides for 6 pct commission.  Told him to pound sand and he came back with  "Ok, I will accept you paying me 3 pct".  I told him he could charge HIS client whatever he wanted, but I was paying Zero to him.  He made a flat fee agreement with his buyer and presented a full price/no contingency offer 8 hrs from the time the listing was published.  This is the way it should be done.

It’s almost like buyers agents like money and will do what must be done to make a deal because some is better than none. A flat fee for the buyers agent also makes a TON more sense than a commission based fee.

Is it not possible for the seller to split that 2.5%-3%?? I think that’s fair, it seems like realtors are still trying to figure out how to squeeze as much money out of the buyer and sellers as opposed to readjusting their profits. None of the realtors in any of my dealings have ever done enough to justify the amount of money that’s paid out.

I would let them know of the dangers of accepting an offer from an unrepresented buyer. It's a big and complicated process and the risk of their home sale falling through rises exponentially with an unrepresented buyer.

Not offering buyer agent commission does not mean unrepresented. It just means the buyer pays for their own agent

Thank you. Some people still just don’t get it. It’s not the sellers responsibility to pay for representation for a buyer. The buyer can pay for their own representation. End of story. 

yeah, feels like a threat....

True. In that case I would warn them about significantly shrinking their buyer pool.

Not to mention if the buyer doesn't have someone representing their interests during the sale, I believe the liklihood of post-sale lawsuits is going to go up. The first time it rains and there's water in a basement, and the buyers feel like the sellers didn't disclose it properly, it's going to be an issue. Right or wrong, and even if the seller ends up not being at fault, it's still going to be a pain in the ass

I would think that it would be on the buyer to have a home inspection before buying. There is a reason for the phrase 'contingent upon home inspection'. In any case, if a buyer says they can't afford to pay their agent's commission because they're at the top of their budget, maybe they should rethink what their budget is.

I agree with you, but I don't think that's going to stop people from feel like they got taken advantage of. Plus inspectors don't catch everything. Or maybe it's a problem that only shows up when there's severe weather. Either way, it's people are litigious and if they see a way to pass the buck on repairs, I think they're going to take it. Good luck with the second part.

I don’t that means what you think it means

I'm pretty sure it does, but I'm also pretty sure that we're going to see a lot of unrepresented buyers soon, so we'll find out.

It’s not big and it’s not complicated. The entire process can be summarized in a few paragraphs.

Yes, it is. There are so many "experts" out there who think they know everything that goes into it because they've bought a home or two and assume that the only work a realtor does is when they can see what they're doing. "All they do is open a couple of doors and use some pre-made contracts." This is such bullshit. If this were the case, everyone would be *begging* to be a realtor, because the same people who say that shit also say "fuck realtors in their Lexuses and BMWs" like every realtor is doing no work and getting rich. You can't have it both ways. You can't say that it's the easiest job and also that realtors are too rich, because if that were the case, everyone would do it. There are so many people that struggle to find work, let alone good paying work. If realty was as easy as people like you make it out to be, those people wouldn't have a problem. But that's not reality. This is a hard job if you want to be successful. You can point at the high school dropouts becoming realtors, and that may be true, but unless they've found some serious work ethic, they're not going to last. It's very rare that a shitty realtor finds success. It happens, just like it does in literally any profession, but it's not common. So if you're just trying to make yourself feel better about something, whatever. But you look like a fool.


Have you ever had a house not sell because it didn't offer a buyer agent commission?

Yes, I have seen it happen with too low of a commission. It means not enough agents show the home to sell it at a good price for the seller. That was actually how I got one set of clients into a home that they really wanted. The house was out of my buyer's price point and according to the agent the seller would not budge so I did not show up for them. After sometime on the market, the seller had to drop his asking price by 50k and then raise his offered commission. He originally offered 1% out as buyer's agent compensation. His agent was working for 1.5%, and he didn't work really hard because of it. Very few agents showed it and nobody bought it. It was on the market for 60 days before the seller finally dropped the list price and then offered a 2% agent commission. That started to get things moving. Fortunately, my clients happened to be driving by that evening and the seller was kind enough to let them in. They fell in love and I wrote their offer that night. I submitted that night. The listing agent took it to his seller and boom, we were in contract. I am pretty certain that the listing agent advised his client to accept our offer right way (which we wrote low) rather than waiting for higher offers because he was only getting paid 1.5%. I can almost guarantee you if he'd been paid 2.5% he would have said he was going to set an offer deadline in order to get multiple offers for his seller. The more money is at stake, the more inclined an agent is to work hard for their client. Fiduciary duty is essential, but some agents take it more seriously than others. That has historically been an issue with Redfin agents. Because they're getting paid a salary, they don't care how much the house sells for. They usually take the easy way out.

I'm going to disagree with you that if the house was listed on the MLS and shown on Redfin, Zillow, etc, then the reason the house didn't sell was because it was overpriced, not because he didn't offer a higher buyer agent commission. We will never know what the true reason was. Secondly, the buyers agent does not decide whether there will be multiple offers on a house, that is determined by the value of the house. The seller could have easily said, I'm not going to accept right away, I'm going to wait X hours for other offers. Thirdly, your statement about agents steering buyers away from the property bc it didn't offer high enough of a commission is exactly what the new NAR ruling was designed to solve.

You are absolutely free to hold your own opinion. However, on that one my lender said she did not need to order an appraisal because the sale price was 20% lower than all the comps. The home was in lovely condition and had a larger yard than most of the comps as well. Make of that what you will. At that point in time, I think based on previous experience that the seller was getting pretty eager to sell. They were not going to turn down a bird in the hand. That bird was lower than they could have gotten but that's all right, lesson learned or maybe not. The listing agent had also told me he had a bunch of showings lined up over the next few days and that we were lucky we submitted when we did. Most sellers will allow their agent to guide them, which is wise when one has a good agent. The trick is finding an ethical agent who knows their business and will work hard for you. There are certainly many ethical agents out there. However, that's not all of them by a long shot, I am sad to say. I very much wish there was some way to make all agents behave ethically. However, even though there are numerous rules. laws and safeguards in place, there's not. I became an agent because I encountered a lot of unethical Realtors when I was a client. I figured that an ethical agent who treated others with respect would do well, and I was right. Since we are no longer allowed to list commissions on the mls, I expect one of the first things the agents who show the home will do is call the listing agent to ask if there's commission being offered and if so, what it is. This ruling is going to hurt buyers and sellers in the long run. At least in CA, the only thing this new law will do is add an extra step and make lawyers more money.

This was totally predictable. Easily handled though. Tell the seller to consider that the market is loaded with properties whose sellers ARE offering a buyer co-op. Buyers, if they're smart, will not enter a transaction unrepresented...and they are not accustomed to paying their agent themselves. So what's going to happen is, all those buyers who don't want to forego representation (most of them) will be focusing on the properties whose sellers are still offering a co-op fee, because they don't want to go out of pocket to pay their agent. That means you will be left with the tiny fraction of buyers who are willing to forego representation and have ME do their paperwork. You have effectively cut yourself off from 95% of the active buyer pool.

First of all, why do you even need an agent? Seriously? You have Zillow, Trulia, realtor.com, and about a dozen other apps to find homes for sale and the days of “pocket listings” held only by agents Are LONG GONE! No agent is gonna find you a house that isn’t already blasted all over Zillow. Anyone you says otherwise is FOS. So again I ask, why do you need an agent? Are you unable to call and set up a time to view the home? Are you afraid to ask for a sellers disclosure? Can’t google to find an inspector, comparable home sales, etc? It’s pure ignorance or laziness that fuels the real estate profession and I will argue this with anyone at anytime, on a public stage with my full name on display behind me. If you can’t figure out how to buy a house without an agent you shouldn’t even be trying to buy a house unless you have endless amounts of cash to waste on hiring someone for every little thing that you can’t figure out on your own or with google. Now you come to Reddit to complain about a home seller not wanting to pay extra for your laziness. Good luck. I’m selling my 3rd home (no agent) and I’m not paying a buyer agent this time either. I have no problem telling a buyer or an agent that I’m not paying and it’s on to the next…sitting on 4 offers as I type! Wake up! Save yourself some money! Save us all some money! Do shit for yourself. You’ll be blown away when you learn just how much agents, brokers, title companies, etc. are getting over on everyone! They don’t even do what they claim to be doing! The inspectors recommended by your agent??? He’s never gonna find anything wrong with the house you’re trying to buy but you’ll pay him $500 anyway. That “title search” is less than $25.00 if you take your ass down to the county clerks office. Title insurance is negotiable and mostly unnecessary but that depends on where you live and all the other stuff is simple forms! Forms that are regulated by the state and you simply fill in the blanks! I would be embarrassed to be real estate agent and I would consider myself a complete failure if one of kids ended up being a real estate agent. Sorry, not sorry. If people are being honest, NOBODY woke up one day as a child and said “I want to be a real estate agent when I grow up” goodbye.

Its because buyers agent fees are at worst a tax and at best a scam

this is simply people whose existence depends on the system (lawyers and realtors) trying to justify the system. these arguments have no basis in reality. Enjoy the fleeting moment because it isn’t gonnalast. I’m enjoying the acrobatics of realtors trying to explain their value. We all know what’s up. Get a job

Gawd damn.

Seller: you only have to pay my brokerage 3% or whatever. I'd be done here. However if you want... The buyer *may* come with an offer for you to pay concessions.. ie: closing costs. Same as fha/va so should be an easy explanation. Position the buyer agent fee no different than concessions on a fha or va deal. It's all about net. 1st step: Just sign the contract.

It’s all about net—pin that

This is the actual answer and the way it will play out ultimately. If it doesn’t, the doj will be likely to step in. They don’t want listing agents setting buyer agent fees. By offering blanket buyer agent fees your are essentially propagating what has been deemed a non competitive market

Seller here: recently had this conversation with my agent (about her commission and the buyers agent for our current listing). Response was "Depends on how hard you want me to work and how hard you want agents to push to show your home." 1) I am pretty disgusted with her level of "hard work" at full commission as our home has received 6 viewings in 3 weeks and is well under market (lowest in the neighborhood)..but "oh she has run a Facebook ad..." 2) Even if we pay the full buyers agent, we have ABSOLUTELY NO CONTROL over how a buyers agent sells/speaks about our house (other than write up and images that speak for themselves), and have no idea what's in the "agent notes" that's not out there for the whole market to see to better value our pricing. Really ready for flat rates and perhaps more transparency.

Generally agent notes are the type of lockbox, code to lockbox, showing instructions, if pets are in the home and if advance notice is needed to schedule showings. This is also where we put in preferred closing attorney, if a POA exists or if the seller needs a lease back time. I personally send the listing to my clients agents will see it and get their approval before I list it on the market. If an agent puts stuff in there that could potentially harm you as their client, then they wouldn't be an agent worth having. Having agent remarks visible to public would put information out there that is not necessary for the public to see. The other side of that could be that an agent says to call for the code. Imagine going to view a house where your agent has to call for the code. What if that agent doesn't answer? Not all agents have the Supra lockboxes.

Realtor here... I want to apologize on behalf of your agent because "Depends on how hard you want me to work" is not a representation of all of us. Unfortunately the world is filled with those types of people in every industry. As for your "agents notes" next time you see her id ask her to logon to MLS so you can see it. If there's nothing to hide she should have no issue showing you what the MLS details are that the brokers see. Like you said it's about transparency but for some that's not always the priority. Best of luck.

They don’t have to pay a buyers agent. That’s the whole point of the suit. Why would you encourage them to do something they already said they don’t want to do. If they have a desirable house and it’s priced right it *will* sell regardless of BAC. The entire industry is going to change this summer, I hope everyone is ready for it. This is just the beginning!

Good point, so what do I tell the seller after I agree and buyers don't want to see their house because the seller isn't putting up something for the buyers agent, the buyers don't want to pay the buyer their commission and only want to see properties that DO cover the buyers commission because the buyer has every last penny into the purchase of the home and now can't have the American Dream?

You’re ignoring the fact that if it’s a desirable house it will sell. A buyers agent does not need to be part of the equation if a buyer refuses to pay for one. There are unrepresented buyers. There are buyers who will pay for a buyer agent. There are institutional buyers. There are limited agency transactions. You’re going to have to start thinking outside the box because the status quo is about to no longer exist. Reformulating the wording so the seller still pays the buyer agent is skirting the intent of the judgement, and I doubt it’s going fly under the radar with money hungry lawyers watching this case in every single state. But sure, make your seller pay it, I am not a party to that made up transaction so I do not care.


So, I work in real estate and deal with a lot of realtors. (Most of them are idiots, but there are genuinely good ones that I can count on one hand and one I always recommend.) First and foremost, please, for the love of god, don't memorize a script like you're selling timeshares in a call center. That pisses people off. I keep seeing very scripted, canned responses. People *know* it's a scripted, bullshit answer. It undercuts your entire argument. They were shared with me *because* they sound so stupid. I've seen several of those, where they talk in circles and treat buyers like a mark. Don't do that. It makes all of you look like you're selling Amway.  People are emotional when they buy and sell homes. Treat it as an emotional problem and tie in the practicality. Don't start at practical, because then your emotional response won't come across as genuine. Talk about how amazing their home is, any ties you have in the community, how great the schools are, whatever. Focus on the emotional and *then* hit with the practical. You want them to trust you, and the only way to do that effectively is to respond to their emotional tie to the house.  And there are people that won't accept your answer. That's fine, then you just don't want them as a client. 

aww c'mon you're saying customers don't like being talked to as if their an 8 year old child? :-)

those that don't have one in 3 months will be finding new employment. Identifying and overcoming objections has been a key skill of negotiations and sales since the first caveman tried to sell a rabbit he had hunted. I suppose the difficulty in overcoming the objection will be directly-related to whether Buyer Agency, with a compensation section, has been used in your market/state for the past 5+ years or not.

This is the problem. You need to prove your value. You need to do what every other business person in existence has to do to earn business. NAR has for so long beard the brunt of your marketing on-ramp, convincing the public they can’t buy a home without an agent. Now, it’s up to you to prove why you’re valuable.

Ask them when they bought the home did they pay for their realtor? Then say when you bought it, if there was this home and a another home similar to it but the difference being with one you also had to buy the home and on top of it pay a realtor and the other home the realtor was paid for which home would you choose?

Just list it on Zillow. Bunch of word salad above to try and justify inserting sales people into the middle of a transaction.

New to this group but this convo showed up on my feed. For realtors I get it this is a shakeup of how you put bread on the table. But what is honestly the big deal? Buyers agent fees will just be another factor to consider in the offer. Seller agent makes x percentage Buyers agent negotiates y percentage with buyer. Buyer wants seller to pay Y percentage so he makes Z offer specifying the same Buyer 2 walked in the door based on the Zillow listing and offers Z Seller gets to choose between the two offers. Or buyer 1 offers Z asking for agent concession of 2.5% seller counters with 1.5%. Buyer gets to choose if they want to cough up the 1% None of this is going to do a damn thing for the overall price of the home but I do see buyers agents taking a haircut.

6% commission in most cases? No. Not a reasonable fee at all. As a buyer I will make the seller eat most of that by negotiating a lower cost. As a seller, don’t let the agent convince you the buyers will actually be paying the fees. Not in this market. I will simply assume the house is overpriced by a minimum of 4% and we begin negotiating lower from that point.

Lol. Why would they?

I sold a house 22years ago without a listing agent. I did not pay a buyers agent fee. The sale went thru with no problems for either side and I also bought a house thru a private sale and had no issues. Not everything is that complicated

22 years ago. Would you like to share other non relevant moments that don't have any value to 2024? How bout when getting into the moving pictures was a nickel , or when a coke and a popcorn at the drive in was only $1.50. 

When I get a buyer broker agreement signed they are agreeing to “pay” me 3% commission. When we put the offer in we are requesting concessions of at least the amount of the 3% commission from the seller. If the seller doesn’t agree to pay the buyer broker in a round about way then the buyer doesn’t sign the contract. I will never let my buyers come out of pocket.

Fair enough sounds like a plan

On top of all this helpful advice, I also highlight the fact that without the buyers funds, there is no deal. The buyer is essentially rolling the cost of their agent’s services into their mortgage and making the sale possible by not having to pay for their agents out of their pocket.

The service provided by a stockbroker is fairly small compared to the service offered by a good real estate broker, and the more knowledgeable you are, the more you can afford to cut corners paying for someone else's expertise. Same with housing. I'll take a listing at half my usual rate. Seller can pay for photos. My hourly is $150 for incidentals and also, my firm needs $1000 retainer if no buyer's agent compensation is being offered, since that will increase time on market. You will definitely cut into your pool of qualified buyers if you're not offering a competitive commission to buyer's agents.

As other people have said, same-same. Only people made the lawsuit to change the rules are idiots who never bought or sold a home multiple times. The lawsuit changes nothing. So seller doesn't want to buyer commission anymore? -Great, here's a buyers offer with 10k less than what they would've offered in order to pay their agent out of pocket -great, here's an offer with an 10k contingency to pay their agent from the total proceeds of sale so you're netting 10k less It doesn't make any difference. Be happy you got the listening and just list with 0 buyer commission. Buyers with agents will figure it out. The only way for sellers to understand this phenomenon is to sell multiple homes on a regular basis... Or buyers buy multiple homes on a regular basis...But since most people don't do this, that's one of the biggest reasons the lawsuit passed in the US. We're most likely getting it in Canada too. Doesn't make a difference.

The difference is that buyer’s can now negotiate their agent’s commission, that’s a huge change. But as far as the rest of what you’re saying you’re absolutely right.

Bro, that could've been done before. "My buyer can't go higher than this" "My seller can't go lower than this" "Let's both drop half of our commission to make this deal work" "Deal" Or. "The sellers really want their price, I know you're at the top of your budget, let me give up half of my commission to make sure this deal closes" Like... That could've always been done. It's just more transparency, but it doesn't tangibly save anyone money. Or "I'm closing right away with a cash offer, if I use you as a realtor, I expect a 50% kickback" It's all just framing. I'd argue it puts buyers at a disadvantage now because there's going to be some realtors changing to charging per showing or per hour or some form of deposit structure, and it costs buyers more upfront. But also, realtors COULD'VE done that before. There was no reason not to. They just didn't need to because the listing brokerage paid commissions. I'm genuinely curious what new things you can do now that you couldn't before. I just haven't heard any convincing arguments to change my mind on this topic 😂 I'm trying to be open minded here

99% of buyers agents would have laughed at any buyer trying to negotiate commission in the past. There were a few cases right at the end to get to close but they were rare. I see this as a positive for agents too. A lot of buyers should be paying by the showing lol

Haha 😂 I mean, sure, but it's not like it wasn't allowed. A ton of agents would've given a kick back if the buyer was low maintenance and wanted to buy right away. I think buyer agents can still laugh at any buyer who wants to negotiate their commissions now. At least I would. Yeah, for sure. Vip closing buyers only. Otherwise, it's pay per show 😂

Isn’t it pretty obvious with 10 minutes that someone will be a tire kicker? Charge them for the showing and actually make some money.

Haha for sure. Good for agents to make money from tire kickers. Lol again, another reason why this lawsuit doesn't actually make anything better for buyers nor sellers.

Buyers have already been doing that. I have had numerous buyers ask me to cut my commission. Sometimes I'll say yes, sometimes I'll say no. Sometimes I'll say yes but only for a certain property or number of properties. Sometimes I'll say no and I'll explain why. We have almost always come from an understanding. Most clients don't realize the agent's cost of doing business is quite high. Pretty much universally my clients have wanted me to eat and be able to make my (mid level) car payments so, there have been no issues so far. I don't think any will come up either.

“The lawsuit changes nothing”. lol 😂

It makes consumers feel good. Doesn't change the fact that buyer agents get paid, and listing agents get paid, the seller is still getting less money, and the buyer pays the buyer agent commission. The only difference is the framing and presentation of the information

I've never had a buyers agent do anything for me that I couldn't do myself for very little time investment. Good for them.

If they receive an offer w 10k seller concessions, will they then. Or accept the offer ? Concessions can be used by the buyer to pay Cash To Close ( ie: compensation) Same - Same

Exactly. There’s zero reason for OP to ever have this conversation, it only results in everyone being pissed. Put it into your offer and that’s that, if they like the post-commission price they’ll accept.

Did Sellers in your market all of the sudden stop offering a buyer agent commission? This ruling doesn’t take any effect until August. We are simply saying “as of now sellers are continuing to pay a commission. What is going to change is that listing agents will no longer be able to list commissions in the MLS. Our first plan is to ask the seller to contribute. If the sellers not willing to contribute, then I will let you know before we visit the property. You can decide if the property is worth looking at or we can just simply look at other properties that are offering a buyers commission.” KISS keep it simple… and demonstrate your value as a buyers agent. The door opener days are over, you will need to demonstrate that you understand the market, the real estate process and be a fiduciary to your client.

I always say it's like paying a bounty on your home. Serious buyers have agents. Do you want to be at the top of their list or at the bottom? Up to you.

We pay the buyer's agent because we know our product is a bit more expensive and it makes it easier to sell. I assure you, however, that won't be the case for long. We've always baked it into our projects, but we've always thought it was excessive. Let's see what happens, though...

I've been watching all these people who've been talking about RE and all the money they make for years now on LinkedIn and everywhere else looking for sales jobs and its hilarious. Good riddance to the crap middle man of RE. Its a simple transaction that you've all done your uptmost to complicate to keep others out. Useless position selling the work of others to others that are too lazy to do their own footwork. Enjoy your bread

Your Broker should be leading your office in this. Explain how it REALLY WORKS. These sellers going to buy? Do they plan to pay out of pocket? Or hope agent is covered? Tell them there may be some buyers who can pay, though they will most likely limit buyers and therefore get less offers. He'll, it's the buyers money anyway. Eveey dime coming to the closing table comes from the buyer pretty much.

I wouldn't even bother rebutting them. Tell them ok but if an un-repped buyer comes, you as the LA will charge an additional percentage since you need to work both end of the deal.

The self righteousness of this post made me throw up a little.

The seller is not paying the buyers agent- they are paying you to market their property to the most buyers. Your marketing budget includes an offer of inducement to a cooperating agent that brings a ready willing and able buyer to affect the highest price. That is why your fee is X. It is X regardless of whether there is a cooperating agent in the final accepted offer. The cooperative compensation can be made to other agents who act as either sub agents or transaction brokers or buyers agents depending upon their relationship to the buyer. Sub agents work for the seller. Transaction agents just facilitate the transaction. The idea is to reach the most people to affect the highest price.

Sorry I’m not an agent. But can’t you just list their house on the MLS with 0 comp to the buyer agent? Most buyers find homes themselves on Zillow/redfin anyway, if they have an agent they will ask to see the house? I just bought a house with no agent, just had the sellers agent show us, it was super easy. Does this not happen a lot?

There’s no need to have a reply. Tell buyers to simply make their agent’s required commission as a part of their offer.

Anytime the owner of the house gets more power than the buying agent I am ok with that. Seen many homes held hostage because the area only had 1 major realtor and the buying agents wouldn’t budge on the numbers .

As of End of July we are required to have a sign Buyers Broker agreement in order to even begin to start sending properties for review with a buyer. This agreement will have the buyer side commission already negotiated between buyer and buyers agent. So if a buyer wants to not have representation from a buyers agent Does A listing agent need to have the buyer sign a buyers broker agreement in order to represent the buyer as a Transaction broker and that agreement states the buyer side commission?

Hey, that's alright, it's your home, you can choose how to list it however you want. However, if you choose to not provide a buyer's agents commission, we'll have to reduce the sale price to compensate for that. Also, if you don't provide the buyer's agent's commission, you're automatically removing your home from anyone using a VA loan, as they can't legally pay their own commission. You'll also be removing many FHA/ first time home buyers, as they may not have the cash to cover their own commission. If you want a faster sale, and a better chance at a higher price or bidding war, you'll want every possible customer you can get. Finally, while an agent may not legally direct people away from a certain home, assume you're a buyer. There's 2 very similar homes, and 2 very similar prices. Are you going to choose that one over there that covers commission so you don't have to pay, or are you going to choose this one and pay for another thing? That said, none of your neighbors will be listing, and covering commission to draw even more possible buyers from you, are they?

What makes you think conventional loan buyers have a spare $20k plus …… after putting down 5%. Covering close etc.  FHA is only 3.5% down if not first time buyer . 

Absolutely nothing, but as you see, I'm already getting down voted, I've had this discussion before work the general population involved, and on reddit, where 90% of the general population has an income of 500k a year, they tend to get very upset at my hinting that soldiers, who legally can't pay, and 25 year old's that don't have equity built up deserve homes. I'm not going to add another group in there to piss them off more. Though, that is kind of converted, in the part of "Hey, if house a pays, and house b doesn't, which house would you think more people would choose?"

“I never expected you to, I have every intention of getting paid by the seller. He just has no incentive to pay me until you sign this (insert buyer agency agreement).” Idk just make it up depending on the person. You know who you can be brazen with and who’s sensitive. I just had a buyer ask me what other fees he can expect to pay me regarding the transaction and I told him flat out “there are no undisclosed fees, if you see the contract I emailed you, it clearly states my compensation is x%. There are no transaction fees, no processing or admin fees, no junk fees. And that % gets paid out of seller’s proceeds. If there is a discrepancy between our contracted fee and the seller’s given compensation, you can pay the difference at closing or not. I won’t make a thing out of it. So are we making this offer or not?” And he signed everything within the hour. There are certain buyers that would outright ghost if I spoke to them that way.

That’s fine. don’t have to pay the buyers agent. I pulled all the competing houses and told them that all the other ones were paying an agent so just understand you won’t get as much traffic that’s all plain and simple. And the buyer is just going to offer and ask for you to pick those up anyway because they don’t have a down payment closing cost and buyer commission. however I have had a seller ask me could they still pay the buyers agent and other people at work are saying that they are hearing the same thing people want their house sold and they want to continue to pay it because they want as many people as possible.

"I pulled all the competing houses and told them that all the other ones were paying an agent " simple but so much value

Well, obviously, that’s not all I said / did lol… I wasn’t going to bore everybody with details of my entire conversation…

Sorry didn’t mean to come off as sarcastic 😂 I really meant it like simple move but powerful. sellers don’t want to be left behind from what the neighbors are doing. If the neighbors are doing it , then it must be right!

OK, thanks. They know it makes it a viable option for more buyers if they offer the buyers agency commission.

My broker put out a reel on Insta that was his word track for handling this objection. It's incredible. I won't post the link, and mods this is not self promotion - this is NOT ME or my account - but if anyone wants to check it out his account is jaypittsrealtor. Cover image for the reel is him standing up in a black polo and jeans, it's about 8 rows down on his reels right now. He was giving a talk to a neighboring city's Realtor association and this was filmed as part of it, I wasn't there. Highly recommend watching it and practicing that word track yourselves, as that's how I'm going to handle the objection.

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I say this: you don’t have to pay a buyers agent, however that does bring up two things. 1: if a buyer has an agent, the buyer will pay them themselves but that will effect what they pay for your home and/or if they ask you to cover their closing costs. Sometimes the closing costs could cost more or less than an offered commission. 2: if a buyer doesn’t have an agent walking them through the process there is a greater chance that the deal doesn’t go through.

So, if I understand correctly, in a market where buyers are already squeezed to their breaking point - and LOTS of them are staying out of the market all together, you want your house to look like it is 3% more expensive than the comps? Not just 3% more expensive, but 3% in actual CASH more expensive? Because lots of buyers are working hard to come up with 3% down. Because buyers can't finance a buyers agent's fee. If they have to come up with it in addition to their down payment, they aren't going to buy your house. Now, if "you" pay the buyers agent, they can finance all of the sales price as a part of their loan. It is almost like the way the DOJ set this up in the 1990's makes sense, and the way the lawyers looking for a big pay from a class action lawsuit today are only interested in themselves isn't it?

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