Is it ok if I set a fixed amount or fixed percentage of sale as my buyer's agent comission?

Asked by Homefun, Columbia, SC Thu Oct 4, 2007

I'm afraid the buyer's agent might accept incentive from seller. I heard it before. Can I state it upfront to my buyer agent that he/she can't accept any incentive from seller?

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Ute Ferdig, Agent, Newcastle, CA
Thu Oct 4, 2007
Hello Homefun. I personally do not like it when the seller offers incentives to the agent who brings an offer as I do not want my buyers to think that I am only showing the house because of the higher commission or the bonus. I always disclose the fact that there is a bonus before I even show the property. When I have a listing and my seller is very motivated, I always suggest that the seller offer to give the buyer a special incentive as opposed to the buyer's agent. To me it just makes more sense. If a buyer told me up front that he/she did not want me to get a bonus, I would explain to the buyer that I would not want to exclude properties solely because the seller offers a bonus and that I would disclose the extra incentive to the buyer before showing it. I think it would be fair if I'd split the bonus with the buyer to make it a win win. If I were you, I'd discuss this with the agent. Any reputable agent would understand your concern.
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Trisha Lee, Agent, Columbia, MO
Thu Oct 4, 2007
If you have a reputable buyer's agent they will look to find the property that matches your needs not one that offers them incentives. Generally the additional commission to the buyer's agent is just to make sure that property gets shown to the buyer and not overlooked in the shuffle. Your agent should tell you where there is an additional incentive offered to them so there is nothing hidden and no suprises.

When you are a seller offering additional incentives to the showing agent puts you ahead of other marginal properties. If there is a lot of inventory of houses that are similar (like entry level new construction but different builders in the same subdivision) the additional commission to the buyers agent shouldn't make a difference.

When the situation arises and I am the buyers agent I always make sure my buyer knows the seller is offering something extra to me and I've never had a problem.
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1 vote
Elizabeth Gi…, Agent, MO,
Thu Oct 4, 2007
Because the seller has signed a contract with the listing agent upfront, the buyer's agent's commission is already determined. You don't have a say in what the buyer's agent gets paid.

The very best buyer's agents work on your behalf exclusively and don't pay much attention to what the commission is. Ultimately, if you feel the buyer's agent is only wanting you to buy a particular house because there's an incentive on it and not because you are absolutely in love with it, then you need a new buyer's agent.
1 vote
The Goetz Gr…, Agent, Englewood, CO
Mon Jul 18, 2011
I am not sure how it works in South Carolina, but in Colorado on our Buyer Agency contracts you can negotiate to pay the buyer. This can mean that the buyer will seek to get payment from the listing agent and if they refuse to pay you will have to, or this can mean that the listing agent will not have to pay and you will cover the negotiated commission. I would personally recommend that you have your agent seek payment from the listing agent so that you don't have to. The reason you would want to do this would be that the listing agent is going to get a commission from the seller that they (most likely) plan on splitting and paying the buyer's agent with.
0 votes
Perry Hender…, Agent, Austin, TX
Thu Aug 5, 2010
Yes, Everybody is offering incentives right now though....
0 votes
James Gordon…, Agent, Hamilton, OH
Wed Aug 4, 2010
Homefun I am a Homesteps buyer select agent in my area. Homesteps (Fredddie Mac) in my area is currently offering 3.5% buyer side commission to all Realtors® and if the property is sold within 90 days of the initial listing date a 1000.00 to the buyers agent broker.
That said I have buyers that closed on a Homesteps property about 6 weeks ago. The property was listed at 49,900 they purchased it at 47,000 and a 3% seller contribution to closing costs. Financing with a FHA 203k loan. There are 21,000.00 in repairs and energy efficient upgrades that they are doing to the property under the 203k. The neighborhood for their type of home runs in the 95k range. 68,000 in the home, upgraded to one of the nicest homes on the street in a 95,000 neighborhood. Please do not tell me when I disclose any bonus or incentive to my buyers that I have not done the work to earn it. My buyer clients are happy about their new home and the 20,000.00 plus equity that they have.
0 votes
Ling Bunch, , Columbia, MO
Tue Aug 3, 2010
Yes you can. Buyer agent should tell you what seller is offering anyway.
0 votes
M. A. Groves,…, , Columbia, AL
Thu Feb 14, 2008
When you hire a buyer's agent you have a right to negotiate any pay structure that works for both of you.
Fees are always negotiable.
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0 votes
Perry Hender…, Agent, Austin, TX
Thu Oct 4, 2007
Of course you can but I'm not sure why you'd want too as you coud use that money to help buy the place.
0 votes
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