The BAC (Buyer Agent Commission) needs to be competitive for the marketplace. Paying less than the competitive rate for your area will result in decreased showings.
Agents will find the best matches for their clients, and make those the priority. A buyers agent will not eliminate a property because a low BAC, if it is a great match. Neither will a buyer agent push a property that is not a good match. Credibility with the buyer, pride in a job well done, potential referrals, future business referrals and a satisfied client take priority over a high BAC. If you pay too low of a BAC, you will retain the perfect match showings, but loose out on some of the â€œmaybes.â€ You need your property shown to all potential buyers possible.
For all sellers, I recommend they offer a competitive BAC. If a seller was not represented by an agent, either a FSBO or FSBO that was flat fee listed, a higher BAC, I still donâ€™t recommend raising the BAC. Instead, hire yourself an agent and allocate funds to paying for seller representation.
Jodi mentions that it is no longer the Realtor who dictates which house is shown, it is the buyer. In the case of a weak buyers agent, who does not know the inventory, and is only a taxi service, that may be true. Buyers play a very active role in the researching property listings online, then discuss their findings with their buyer agent. On several occasions I have had a buyer inquire about a property as result of their online search, but, rule out viewing that property in person after our discussion. Conversely, I have encouraged buyers to visit properties that they had overlooked as a result of their online viewing. The working relationship between a good buyer agent and their client is substantially more than a buyer agent providing taxi service and lockbox access. As a seller, you need buyer agents exposed to your property and excited to share information with their buyers. If you rely solely upon your computer presence, you will shortchange yourself by only accessing a limited number of potential buyers.
Jodi also asks what the listing agent is giving up. I was not able to follow the purpose here. I suggest to sellers that they look at the expectations of each side and determine the appropriate compensation for the work to be performed as guided by a competitive fee for the area. Hiring a real estate agent is a lot like hiring for a temporary job. What the listing agent is or should be paid is not dependent upon what the selling agent is paid; and visa versa. What amount is competitive for a full service buyer agent in your market? Assign that amount as the BAC. Now, determine what you expect the listing agent to do, and meet with a prospective listing agents who provide those service levels in your marketplace. The amount paid for full service may even vary in accordance with the anticipated expenses a listing agent may incur. If my proposal as a listing agent includes multiple full color print ads in high profile magazines, the fee I assign will be different than a proposal that did not include those same projected expenses. I suggest that the seller be competitive in their BAC in order to get the most possible showings, and discuss BAC before even discussing the listing side of the commission. For the listing side, our fee may be less, more or the same as the BAC. I never suggest a seller compromise on a BAC in order to pay me more.
Paying more than the competitive rate is not necessary, but as a buyer agent, itâ€™s fine by me to get paid more! It wonâ€™t influence me to sell your property over another, but you will get a big thank you!