Choosing the amount of buyer agent commission to offer | Columbus Flat Fee MLS Listing Self List in the Realtors Multiple Listing Service

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Columbus Flat Fee MLS Listing Self List in the Realtors Multiple Listing Service

Highest Rated Flat Fee MLS Listing Service in Central Ohio
BuySelf, Inc., Real Estate, Flat Fee MLS Listing Home Sales,Bloomington, MN

Choosing the amount of buyer agent commission to offer

I am frequently asked by Flat Fee Sellers "what should I offer as a commission amount to the buyers agent?" or more directly "can I save even more money by offering the buyer agent a lower commission?"
I have a strong opinion on this topic: Pay the most common buyer commission amount for your given area, around half the total commission sellers pay to sell a home the traditional, expensive way with a broker, 2.5% to 3% in most areas. This is not the area to try to save money, it will hurt your market time and possibly the success of selling your home.
There are lots of misunderstandings about real estate commissions so lets make sure we understand each other: In a traditional broker listing, the broker will promise to sell the home for a commission of 5 to 6% paid at closing of the sale. That listing broker (who helps the seller) then offers usually half of that amount (2.5 to 3%) to a buyer agent who procures (finds, brings, etc.) the buyer who successfully closes the purchase of the home. The amount offered by the listing broker is required to be listed in the MLS where all buyer agents (but not the general public) can see the amount offered.
So why not offer less? The best analogy I can give is to think about your MLS listing as a help wanted ad for buyer agents. Imagine your listing as saying "Help Wanted-buyer agent to bring their buyer and get paid $X for a successful transaction." Imagine that buyer agent reading that ad alongside 5-30 other help wanted ads, and 90% offer the same amount. But that one ad only offers 30% less, or half as much, which one do you think will get the most showings? Does this mean buyer agents are greedy and overpaid? Perhaps a few are, but for the most part they are not. It may seem like lots of money for doing one showing, and it would be, but the reality is that it isn't one showing. I worked as a buyer agent for 6+ years and I would guess I averaged 120 hours work per buyer, all included.
Then factor in that some buyers don't buy, some go through the whole transaction and lose their job a few days before closing (therefore, no commission for all that work). I could go on but I won''t. I key point here is that there is an established market rate for buyer agent services, and there generally isn't an opportunity to save money here without costing you significant time and money elsewhere. The place to save on commissions is the listing commission which my Flat Fee Sellers are already doing.
I've had a handful sellers that have saved money on the buyer agent commission but they have been few and far between. Usually an extremely unique property with no competing properties on the market, and in a strong sellers market. Most sellers who have tried to shortchange the buyer agent end up wasting valuable market time, losing out on potential buyers, and changing to a market rate offer later.

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