Is compensation negotiable?


Fact: Real estate brokers’ compensation rates are not regulated in any state and are ALWAYS 100% negotiable.

The compensation offered in the listing will be auto-filled into the purchase and sale agreement from the listing - or inserted by the buyer's broker (if the auto-fill tool is not used).  The buyer and buyer's broker then need to decide if the compensation in the listing will be accepted as offered in the listing ("Pay as Offered") or if the compensation will be modified by the parties in an addendum

You may choose to offer a flat compensation of ($10,000 for example) for a buyer’s agent who brings a qualified offer for your home.

That agent may submit the offer along with a addendum asking you to pay them 2.5% of the purchase price. (On a $Million Home that would be $25,000) That addendum must be agreed to and signed off on by the Buyers as part of their offer. (So the buyers will understand this “Ask” may affect the competitiveness of the offer they are submitting.)

You could accept this request, deny it, or counter back at a different number.

You could even offer LESS

If your home is listed at $1 million and you are offering a $10,000 compensation to the buyer, and their offer comes in under $1 Million and they ask for more…. You could choose to accept the lower offer or counter back AND you could also LOWER the compensation you are offering down to $5,000 or some other number.

(NOTE) The buyer’s agent has the checkbox option to simply accept the compensation offered. In that case the compensation is not negotiable.

Surprisingly, many people think that real estate brokerage compensation rates are “set” in their area, and they must pay a specific percentage of the sales price to the agent in order to get their services. This is absolutely not the case.  In fact, you can pay whatever you and the agent have agreed upon.

What is a “Fair” amount to pay for real estate compensation?

“Fair” is whatever you and the agent decide is fair, and just as you are not under any obligation to pay more than you want, the agent is not under any obligation to do business with you if they are not going to earn what they expect.

What will most likely happen is Buyer’s agents will have what’s called a Buyer’s Agency Agreement with their clients. This agreement will guarantee them a certain compensation.