Home Sellers – Wise Up!

Now that broker commissions are no longer visible to the public, home sellers are now getting smarter. Home sellers are starting to realize the true value of the Buyer’s agent. 

You see, in the past, home sellers were led to believe that their listing broker would most likely find a buyer for their home. After all, their listing broker is guiding all of the marketing and advertising. The home sellers were also led to believe that all the buyer agents working at the listing brokerage would prioritize selling only their own brokerage’s listings. That is ridiculous. But many unscrupulous listing agents who work for larger brokerages don’t want home sellers to know the truth because they would be far less likely to get the home seller’s listing if they had to stand on their own merit. 

The fact is that the larger the listing agent’s brokerage is the smaller the agent’s commission split. With higher commission splits, smaller listing brokers tend to do much better marketing, to curated target audiences, and are thus more likely to sell their listings quicker at a higher price. 

Today, home sellers want to know exactly how buyer agent compensation works under the new rules. Three years ago, it was rarely even mentioned because the cooperating buyer’s broker compensation was already agreed to in home seller’s listing contract. Now, it’s become front and center in almost every listing conversation. Because buyers today must sign a Buyer-Broker Agreement prior to touring a home with a Realtor. That agreement lays out the Buyer-Broker’s method of compensation for the Buyer’s agent who is helping the buyer. 

While it is still most common for the home seller to pay the buyer-broker’s commission at closing from their sale proceeds, the Buyer-Broker can be compensated directly from the listing broker instead of the home seller or directly from the Buyer. However, direct compensation from a buyer to their buyer-broker is very rare. First of all, buyers are not used to compensating their buyer broker. Also, the buyer may already be struggling to come up with the required minimum down payment to obtain a mortgage.

So, if the home seller refuses to compensate the Buyer-Broker, the buyer may need to pass on the home for sale and find a home where the home seller is willing to pay the commission. Therefore, if a home seller decides that they absolutely will not pay the Buyer-Broker, the pool of prospective buyers for the Seller’s home is greatly reduced. This will also cause the home to stay on the market much longer, racking up “Days On Market” in the MLS. And, guess what? Increased MLS Days On Market greatly affects the final sale price that a home seller can achieve.

MLS Days On Market is the subject of another video of mine that everyone needs to hear about. Subscribe to my YouTube Channel @BrokerBrink and be sure to view that important video.

Luxury home listings need further marketing reach than only MLS syndication. International and multimedia marketing is necessary to reach the smaller pool of prospective buyers who can afford luxury homes. You see, when a luxury home for sale is advertised correctly, it is targeting the prospective buyers and real estate agents searching for homes for their luxury buyer-clients.

Therefore, the wise home seller aligns themselves with the best listing agent and brokerage that can execute a targeted marketing and advertising plan, and they don’t get fooled by larger brokerage listing agents who tell mistruths about how real estate is actually sold.