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Home Seller Tip for Today - Negotiate Both Parts of the Commission

The Problem

For sellers, real estate commissions are one of the most misleading and anti-consumer aspects of residential real estate.  Real estate brokers typically omit (except in those states that require more thorough fee disclosures) negotiations on how much is going to be offered to the buyer broker. And they almost never publish the buyer brokerage fee that they are offering. In addition, we have yet to find a broker who offers this same amount to an unrepresented buyer who is trying to save money by doing the work themselves. 

The Solution

  1. Unbundle the Commission! Always insist on negotiating the commission as two commissions. Negotiate the fee you are going to pay your listing broker and the fee that is going to be offered to brokers working with buyers. Buyer brokers have to do a lot more work and invest a lot more time and money into their job, so do not be afraid to offer a larger percentage to them.
  2. Offer the buyer broker commission to buyers! If you want to generate more interest in your property, make sure that the money being offered to buyer brokers is also offered to unrepresented buyers or "do it yourselfers."  Your listing broker will likely try to negotiate a price differential to unrepresented buyers against your favor. Do not fall for it. Unrepresented buyers should not require more work if they use an attorney to draft the offer.  Finally, insist that the listing broker publish the fees being offered to buyer brokers and unrepresented buyers in all their advertising on your house.

Example:

Seller calls 5 listing agents with this offer:  I will consider listing my house with you if you agree to a 2% commission and offer 3% to buyer brokers and unrepresented buyers (total of 5%). You agree to publish the buyer broker/unrepresented buyer offering in all your ads about my house.  

Click here for TIPS on how to negotiate commissions a seller's Realtor.

Click here for TIPS on how to negotiate the terms of your listing contract.