I'd advise that you separate the agreement with the agent from the offer of the buyers.
This is just to add what everyone else has answered here -- we Realtors are enjoined from discussing/publishing commission rates and fees since it is considered price fixing -- ultimately it is the market that determines the commission; and since we're talking real estate, everything is negotiable. Good luck!
Consider offering 1% toward buyer closing costs or a discount on the home.
Remeber you want the buyer not the agent. Give the incentive to the buyers by either pricing it right, pricing in a search criteria that his 2 targets (ex. Never price a home for say 599,999 price it at 600k - it cdaptures 2 seperate targets), offering to pay closing cost for the buyer or a combo thereof.
I am a listing agent myself and when I have a person or family who needs to move quickly or the home is located in a neighborhood with lots of selling competition, I recommend an above average buyer agent commission (BAC).
Congrats on the contract! Don't you love it when that happens?
Depending on the area and how long the home has been on the market, I would think 2.5/3% would be just about all of it ... remember, most realtors are looking for work right now.
Also, I wouldn't be timid with offering a cash bonus to a qualified contract at closing ... you know what they say: "cash is King"
Keller Williams Realty
If you pay 1% more to the buyers agent - this falls under the Company split. If you Pay a Bonus to Selling Agent this should 100% go to the selling agent.
Regardless of the fact that the agent is supposed to be imparcial and show properties in the best interest of their client - This BTSA - Usually $1,000 will get their attention and get your property shown faster.
If you have a property that needs to bring the higher price than the norm in your area you need to put a BTSA on it. This way it will be shown, people will see it and then see the value.
And for y'all that say where did you dig this old one up. I just found it and any good question has answers to more than one person.
I have always been a firm believer that lowering the price is the best option for sellers...At the right price (as deemed by the Buyer), the property will sell.
However, your market may be different in that you may need to do something "extra." To know if a bonus to the agent is effective in your marketplace, I would suggest having your agent pull all of the pending and closed sales since your home was listed to see if any of those were offering a bonus, higher commission or if they were just the lowest price.
Here in Florida, many of the builders are offering to pay buyer's closing costs, build them a pool or even give them a car with the home purchase...and those same builders offer agents bonuses that match or exceed the commission as well...As a result, we are seeing the new home inventory dropping.
I actually just posted a blog about this very same thing...you might find the "realtor" responses worth reading at:
With that being said, I think it's safe to say you should know what your competition is doing and beat them at it! Good luck!
LaShawn Norden, PA., REALTOR, ALHS
RE/MAX Central Realty
1135 Town Park Avenue, Suite 1105
Lake Mary, Florida 32746
Paying the closing costs is another ... giving a $4,000 interior paint credit .. or "X" amount of $$ towards kitchen/bathroom upgrades or remodel .. we once gave a $6,000 credit card at Home Depot, another time we gave a $5,000 granite top credit with the work being done 2 hours after closing ..
We even paid the moving expenses on 3 homes I sold, one move was $8,900 .. so that item has always been a success ...
Anytime the buyer can see an feel an immediate return or bonus in their favor, it gets and keeps their attention ...
Paying extra commissions has the attention span of an Asparagus ... you want the buyer excited, not the agent ..
Realtors have fiduciary relationships with their clients and it is part of our code of ethics to find our clients the house that is right for them, not the house that will get us the most commission money.
Hope this helps.
Best of luck to you!
This is a proper criteria for the buyers agent to take into consideration. A seller offering the bonus has signaled that they are more motivated than the average seller to do what it takes to move the property.
Knowing this is in the buyers favor (and in the buyers fiduciary interest) as it signals that the seller is most likely to cooperate on items such as inspections, lender required repairs, closing and occupancy schedules, perhaps even on closing costs.
It is up to the buyer if they like the houses they see. The bonus makes it more likely they will see the house.
Even if an agent is motivated by the carrot of increased income, and unaware that the representation of their buyer is improved by arranging a tour that is favoring the bonus house over (all other things being equal) - competing houses, they are providing improved service by adding the bonus house to the tour.
After a buyer has been exposed to houses that they like, they will offer on the house that they like the most
At that stage of the sales cycle the increased bonus has little or no effect as the decision to buy or not is mostly in the buyers control,.
If you have already offered 4% to the buyers agent that you have a contract from, you cannot retroactively withdraw that commission offer to that agent or to any of the other agents that showed your house.
With that said, there are some agents out there that do not do their clients justice and will only show 3% or HIGHER so I always recommend to my clients that you have to capture as many in this market as possible, even to those bottom feeder agents that look out for their pocket book before the needs of their clients. Those types are in every business field. I never recommend my clients to offer less then 3% to the buyers agent.
Keep in mind that most of the sellers these days can barely keep their home afloat, let alone pay over and above customary fees to get it sold.
But you also have to compete with new home sales that are offering 5-6% or other sellers that are offering 4%. The higher commission you go and the lower price you can go, the more market you will capture.
It's a tight rope that you must walk on to capture the most audience with the least amount of dollars left on the table.
My advice is to find out what is typical for your area and then go a bit above and beyond if you want that extra edge.
Disclaimer: Please note that any discussion of splits and commissions is purely for educational purposes.