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The Buyer Broker Commission Is Negotiable: What Sellers Should Know When Comparing Offers

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Published by Bob Mathewon12/15/2024

The real estate landscape is changing, and one significant shift is the acknowledgment that the buyer broker commission is negotiable in home sales. While this change empowers buyers to advocate for terms that suit their needs, it also brings new considerations for sellers when comparing offers. Here's what you need to know to make informed decisions in this evolving market.

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What Does a Negotiable Buyer Broker Commission Mean?

Traditionally, sellers often covered the buyer broker’s commission as part of the overall transaction costs, typically a fixed percentage of the sale price. However, the realization that these fees are negotiable introduces variability into real estate deals. This means that in some offers, buyers may request a lower commission for their agent—or even take responsibility for the fee themselves—while others may stick with the traditional structure.

How This Impacts Sellers

When reviewing offers on your property, the buyer broker commission becomes an important factor in determining the net proceeds of the sale. A negotiable commission means you might see:

  1. Offers with reduced commission requests: These could increase your net proceeds but may reflect a less traditional transaction.
  2. Offers where buyers cover the fee themselves: This could simplify your costs but might be offset by other concessions buyers ask for, such as a lower sale price.
  3. Full-commission offers: These follow the conventional structure but could impact your bottom line.

Key Considerations for Sellers

To evaluate offers effectively, it’s crucial to consider the full financial picture. Here’s how:

  • Look at the net proceeds: Don’t focus solely on the offer price. Subtract all potential costs, including commissions, to see what you’ll actually walk away with.
  • Weigh buyer strength: Offers with unconventional commission terms might come from buyers motivated to save on costs, but ensure they are financially qualified to close the deal.

Consult your agent: A good listing agent can help you navigate these variables, advising on how each offer aligns with your goals.

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The Bigger Picture

Snapdoor’s offer platform lets buyers specify the amount or percentage of buyer-broker compensation they would like the seller to pay. The lower the amount or percentage, the more appealing their offer is, and therefore Snapdoor ranks it higher.

The ability to negotiate buyer broker commissions is a win for flexibility in real estate transactions, but it also requires sellers to adapt. By approaching offers with a comprehensive understanding of all financial aspects, you can confidently choose the one that best meets your needs.

Negotiability in commissions might seem like a small change, but it has a ripple effect on how buyers and sellers interact. Stay informed, work closely with your agent, and focus on your bottom line to make the most of this shift in the market.

This evolving market offers an opportunity to maximize your profits—be strategic when comparing offers and embrace the flexibility negotiable commissions bring.