How to Explain 4 Positives of Offering Buyer Agent Compensation to Sellers

When it comes to the NAR settlement—based on a survey that was done with BAM and 1000watt—77% of sellers are willing to offer buyer agent compensation outside of the MLS. They’re willing to adapt to new rules. 

What that means is you have to be ready to talk about the positives for a seller to offer compensation to the buyer agent. 

There’s a lot of noise out there right now that it can’t be done. Well, that’s just simply not true.

Sellers can still offer compensation if that’s what they choose. It’s still an option. 

And there are four reasons you want to be able to explain clearly and concisely at your listing appointments. 

#1: Offering compensation gives your seller a competitive advantage

The first positive is the competitive advantage for sellers who offer compensation—because it’s going to incentivize people to bring buyers. We know there are some agents that will not show a for sale by owner (FSBO). I’m not saying that’s right or wrong, I’m saying it happens. 

So, there’s a competitive advantage for offering out compensation. 

#2: Offering compensation upfront eliminates negotiation down the line

There are going to be hurdles when you’re putting a sale together. Imagine you get to a point when the list price and most of the terms are agreed upon. If that’s the case, and you then have to negotiate one more thing—buyer agent compensation—that could create some hurdles.

That’s just the reality. It’s no different than when someone wants to change terms at the last minute when we’re in the process of putting a sale together. 

#3: The best buyers tend to work with real estate agents

The third positive is that the best buyers tend to work with real estate agents. And we want to engage all the agents. 

In fact, part of our marketing approach is to market to other agents. We know there’s value in working with a great agent on the other side of the transaction. We know that an agent on the other side can help put the sale together when it may not go through. 

Also, these buyers are typically pre-approved. If they need financing, they’ve been financially vetted. And I don’t know any seller who wouldn’t want more of these buyers looking at their property. 

#4: Historically, most buyers cannot afford to pay a fee

Reason number four is that historically, most buyers cannot afford to pay a commission fee.

When I say that, I mean we’ve all seen buyers go to their max in terms of cash to close and their monthly payments. Now, paying a fee affects cash to close in most cases, and it’ll affect their payment because then they’re not going to be able to put as much money down. 

By offering buyer agent compensation, sellers make it easier for buyers in these situations to make the highest offer they can afford (without having to pay their agent’s commission). 

People generally buy homes with two numbers in mind: monthly payment and cash to close. They’re focused on these two things. And many buyers—especially those buying at a lower price point—can’t afford to pay that commission fee on top of that. 

These four reasons are things you must be able to explain. 

“Mr. and Mrs. Seller, I’m so glad you brought up these new rules that are taking effect on August 17th. Let me go over the four positives—the four reasons that it will help you have a great result when selling your home. And then we can discuss what makes the most sense for you.”

You want to go through each one. That is what knowledge brokers do. If you haven’t started practicing this, you better start today. August 17th is coming quickly.