Why is it Important to Pay the Buyer's Agent Commission?

Yes, you read the headlines right - you are no longer able to disclose on the MLS what you are offering to pay the agent that brings the buyer for your listing. What that does not mean, is that you shouldn't offer to pay the buyer's agent. It's all about strategy. Let me explain...

In Texas, licensed Real Estate Agents are required to have a Buyer's Representation Agreement signed between the agent and the buyer prior to showing any homes to their client. In that agreement, the compensation is agreed upon PRIOR to seeing any properties. That means a Buyer's Agent is hired for an agreed rate upfront and then sets out to find the perfect home for their clients.

If that Buyer's Agent comes across your listing, calls your listing agent and discovers you're only offering to pay 1% of the sales price to the Buyer's Agent, but the Buyer signed an agreement to pay their agent 3% of the sales price, then the Buyer has to decide if they want to come up with the 2% difference out of their pocket, finance that 2% difference, or move on to other listings who are offering their agreed upon rate.

Let's break that down into an example:

Your Asking Price = $1,000,000

Buyer's Agreed to pay 3% to their agent = $30,000

You are offering 1% = $10,000

That means you are asking the buyer to come up with $1,000,000 to buy your house, and then another $20,000 to pay their agent.

You have to ask yourself, "is the market competitive? Do I want to eliminate all barriers within my power to get as many buyers through the door? Or do I want to make it more difficult for buyers to come up with the amount of money I want to sell my home for?"

If you want to make it more difficult, that is your choice, but you will shrink your buyer pool and make it harder to get an offer. In a market with more sellers than their are buyers, you've just made your home less appealing. Say hello to longer days on market, fewer showings, and even fewer offers.

If you want to make it easier to get as many qualified buyers through your door as possible, I recommend offering 3% to the Buyer's Agent along with any incentives you can afford. What kind of incentives should a seller offer? Seller concessions go a long way when someone needs to buy down their interest rate, cover closing costs, or pay for costly repairs. Seller's who are motivated to sell their home and launch themselves into their next phase of life often choose to pay more to attract the best buyers to secure the smoothest deal.

But like everything in Real Estate, it's negotiable and completely up to the seller to decide. Personally, I don't take listings that don't offer Buyer Agent Commission (BAC), but I can always refer you to a discount agent. Just don't be upset when you get discount results.

Want to discuss this topic further? Shoot me a text at (817) 865-7575.