Why, as a Real Estate Agent, I Choose to Offer Buyer Agent Compensation
Article published in Northampton Living
(August 2024)
A seller is not required to offer buyer agent compensation. However, offering it remains a key strategy to attract more buyers and ensure smoother transactions. Here’s why I am offering buyer agent compensation in my own property sale, and why I recommend all home sellers do the same.
First, Some Background
In May, the National Association of Realtors (NAR) settled a class action lawsuit that questioned whether traditional real estate commission structures inhibit competition. NAR v. Sitzer-Burnett was brought by a handful of home sellers in Missouri that were misled by their listing agents—the sellers were not told that they had a choice in whether to offer a buyer’s agency fee as part of the transaction. As a result of this lawsuit, and others involving many large real estate brokerages, the NAR agreed to make several industry-wide changes. These changes will go into effect this month, on August 17.
Notable among the changes are that all home buyers must have an exclusive agreement in place with a buyer’s agent that stipulates their compensation – before selling a property. And while sellers may pay for buyer agent compensation, their agreement with their listing agent will make it clear that sellers have a choice in whether to compensate the buyer’s agent.
Here are 3 key reasons why I am choosing to compensate a buyer’s agent:
Attracting a Diverse Range of Buyers: Offering compensation to buyer agents enhances the visibility of your home on the market. Many potential buyers rely on real estate agents to navigate the complexities of purchasing a home, especially those who may struggle to cover closing costs and additional fees. By compensating buyer agents, sellers ensure their property is showcased to a broader audience, including buyers who are actively working with agents to find suitable homes within their financial constraints. Remember, more offers mean a greater chance of being paid the highest price.
Efficient Transaction Management: Real estate transactions involve intricate processes that require professional guidance. Buyer agents play a pivotal role in facilitating negotiations, paperwork and legalities on behalf of their clients. Fair compensation motivates buyer agents to navigate these complexities diligently, ensuring smoother transactions for both sellers and buyers. By compensating buyer agents, sellers can be assured that the buyer is working with a professional who will ensure an efficient transaction where deadlines and professional expectations are met.
Mitigating Legal Risks and Liability: Sellers who engage directly with unrepresented buyers may inadvertently expose themselves to legal risks. Buyer agents are trained professionals who understand the legal and ethical standards of real estate transactions. By encouraging representation through fair compensation, sellers minimize the risk of misunderstandings, disputes or legal claims that could arise from unrepresented buyers.
The Bottom Line
In my experience, offering buyer agent compensation isn't just an expense: It's a strategic move that pays off. It attracts more buyers, ensures smoother transactions, aligns interests and minimizes risks. If you're serious about selling your home quickly and at the best price, consider offering buyer agent compensation. It's a win-win for everyone.
More contributions from Ruthie Oland
