Understanding Buyer’s Agent Compensation – As your listing will be seen by all the local REALTORS through their own private database, you should be prepared to handle a situation where you are contacted by a Buyer’s Agent looking to show your property.
Buyer’s Agents are typically paid a split based on what the Listing Agent charges their client to list the property. Depending on the property and the market in which it is listed, this could be 7% on the first $100,000 and 3% on the balance of sale price, in which case the Buyer’s agent would typically receive 3.5% of the first $100,000 and 1.5% of the balance.
In the case of your listing, Buyer`s Agents have not received any incentive to show or sell your property, as they are not being offered any compensation. Simply put “No Compensation” equals “No Cooperation”. In order receive cooperation from the majority of Buyer’s Agents, we recommend that you offer a cooperating commission to any Buyer’s Agent that brings you an offer.
Does this mean that you have to offer 3.5% of the first $100,000 plus 1.5% of the balance? Absolutely not, Buyer’s Agents know that increased competition in the marketplace has eroded those hefty commission rates, and are quite often willing to cooperate for less money. While it is totally up to you, or if, you will offer a cooperating commission, we highly recommend that you offer a minimum of 1% of the sale price in order to garner the cooperation of the Buyer’s Agents.
Be wary of other FSBO (For Sale By Owner) Brokerages that do not discuss Buyer’s Agent Commissions with you, while trying to sell you their services. Of course, if you sell your home directly to the Buyer, all of this will be a moot point, and you will save yourself thousands of dollars.