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I am going to put up my single family home on the market in Spring. I will use a flat fee MLS. Is a 1% Buyer's reasonable? The home will probably sell for $500K for $5000 buyer's agent commission.
Sure it's reasonable if you plan on never selling your house.
No, I'm not a realtor. But I am a big fan of GOOD Realtors.
I use professionals to do work and perform services for me that I do not have the expertise or qualifications to do myself. That includes hiring dentists, electricians, doctors, car mechanics, attorneys and Realtors. I hire them, and I pay them.
That $5,000 is not the buyer's agent's commission. That is the commission that is split between the buyer and their broker.
Most buyers with agents have a buyer's representation agreement with their buyer that usually specifies how much the buyer's agent will be paid, and here, at least, it specifies that the broker (who receives the commission and then splits it with the agent) will look to the seller/seller's agent first for that commission, and if it's not paid by them (usually in the case of a FSBO who is not willing to pay the buyer's commission), they will look to the buyer for that amount. Buyer's agents might show your house, but their fiduciary responsibility to their client means they are legally required to inform the client that you are paying less and therefore the buyer will have to come up with the rest, per the agreement.
This results in a buyer who is going to look at what they will owe in commission to the buyer's agent and will, quite reasonably, adjust their offer to the seller accordingly. Or, more often, a buyer who will decide just not to look at the house.
2.4% is typical, your looking to cut that by 58.4% to 1%. To give you an idea on a FSBO I'd ask for 3% as more work is always done on my end for the client and typically the seller to get the transaction completed. If I have buyer agency my client would be on the hook for the other 1.4% to buy your house. Not a good idea.
I am going to put up my single family home on the market in Spring. I will use a flat fee MLS. Is a 1% Buyer's reasonable? The home will probably sell for $500K for $5000 buyer's agent commission.
Offer what you want. If the agent doesn't like the compensation you are offering, they can have their buyer pay the difference, except for VA clients.
2.4% is typical, your looking to cut that by 58.4% to 1%. To give you an idea on a FSBO I'd ask for 3% as more work is always done on my end for the client and typically the seller to get the transaction completed. If I have buyer agency my client would be on the hook for the other 1.4% to buy your house. Not a good idea.
You should always specify "in my area" because 2.4% is NOT typical in my area, and even a fee of that will get someone's house not shown because the buyer doesn't want to pay the agent the difference. Yes, fees are negotiable, but a buyer agrees to a fee and in my area, it's more than 2.4% and it's more than 2.9%.
Where the commission split to buyer broker is listed in your mls listings, see what the standard percentage says. Is your area such that 1% CS (commission split) gets shown or shown much. Busy areas, some will purposely avoid it.
Realize that 1% to the buyer's agent is split in some way with their office usually. Sometimes, like with many Remax offices, the agent pays a monthly fee instead of a percentage of all their commissions.
You should always specify "in my area" because 2.4% is NOT typical in my area, and even a fee of that will get someone's house not shown because the buyer doesn't want to pay the agent the difference. Yes, fees are negotiable, but a buyer agrees to a fee and in my area, it's more than 2.4% and it's more than 2.9%.
In my area. Feel better?
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