If you are the seller and the buyers agent put this in the offer just counter offer with terms that are acceptable to you. If the buyers agent wants more than you agreed to offer in your listing agreement and stated in MLS let the buyers agent work that out with their buyer.
Why don't you ask the buyers agent about this? Also, what do you mean by "open market listing?" Are you selling the home yourself or are you represented? If so, why don't you ask your agent? Offhand, the two most common reasons for a 3.5% buyers agent fee are 1) the property is not listed (for sale by owner) and the buyer agent will have more risk and more work to do and 2) the buyers agent is skilled enough and provides higher value so they deserve and demand it. This is a major transaction. Do you go to the cheapest heart surgeon? Also, it is unethical to only show your broker's listings to a buyer.
Listing contracts are set between the Seller and the real estate company. The Seller agrees to pay the listing company x% to sell their home. The contract is not between the Seller and the agent, it is between the Seller and the real estate company. The listing company then sets the commission split between themselves and the company whose agent brings the buyer. . The average for our area is 3 - 3.5% but nothing is set in stone.
The Offer to Purchase is a separate contract from the listing contract. The buyer's agent has a Buyer Agency Agreement with their Buyer. If the Buyer has agreed to a 3.5% BA fee, then the Buyer can ask the Seller to pay that full amount. It's up to the Seller to decide if he/she is willing to pay this. They can stick to what their listing Company is offering or they can agree to pay the higher amount. Sometimes its in the Sellers best interest to pay the extra if its a great offer. If that's not the case, then you can have your agent negotiate a higher asking price to cover the extra fees or you can have your agent counter them out. It's entirely up to the Seller to decide.
As far as the "extra $295". That is a transaction fee which most companies charge on the Offer. Most are between $295 - $495. This also can be negotiated out of the contract. Again it is up to the Seller to decide if he wants to pay this.
It's your agent's job to negotiate for you so discuss with her/him.
Sincerely, Donna & Dan
From what I can read YOU ARE THE BUYER.
When you met up wih your agent he/she asked you to sign a exlusive buyer agreement. This agreement will have specified the miniamal compensation your agent requires. Also discussed at this time would be the options avaialble to you.
#1. Did you sign this agreement?
#2. Did you direct your agent to 'show you everything' or only what conforms to your expectation?
#3. During that discuss your agents compensation could have been negotiated to limit your costs to ZERO, meaning only the compensation paid by the seller will be considered as payment in full to the agent. (Be aware, some listing provide only $1 in compensation to the agent. That doesn't seem fair...right?"
Share with us the discussion surrounding the Exculive Buyer Agreement discussion.
Failing to enter into an EBA and having the discussion puts YOU in a situation completely dependent on the property you choose to make an offer on.
No discussion took place regarding your agents compensation...I guess you'll have that chat now.
Why did...? you ask.
Because YOU allowed the agent to dictate their compensation at the time of the transaction, not when you hired your agent. Actually you did not hire the agent (no EBA) so the agent is free to apply the full weight of market conditions. That, however, is a fair consequence when working with those who refuse to enter into an agreement designed for their benefit.
Don't feel badly. There are thousands like you who refuse to sign such contracts and do not benefit from the compensation discussion. If you read my other posts you'll find what I have shared previously aligns PERFECTLY with your experience today.
Time to have a chat with your agent.
Bottom line it is your offer and you can tell your agent to not do that since it affects the sellers decision. I would dump that agent as well as soon as you could.