As a seller, do I need to include a commission for the buyer’s brokerage?

Should we let the buyer pay their brokerage commission?

  

Including a commission for the buyer’s brokerage is not mandatory. However, it’s worth considering that our fee for professional services typically includes compensation for the broker representing the buyer. This strategy helps maximize your financial return by encouraging brokers to show your property to their clients, thereby increasing visibility and interest. Without this incentive, buyers may possibly instruct their brokers to only show them properties where the buyer’s broker will receive compensation from the seller, potentially reducing competition for your home.

 

Practically speaking, most lenders do not allow buyers to finance brokerage commissions. Consequently, buyers would need additional cash to cover these costs on top of their down payment, closing expenses, and other fees. This extra financial burden could deter qualified buyers or lead to lower offers to offset their brokerage fees.

 

Moreover, buyers who are expected to cover their broker’s commission might:

 

1.   Include a contingency in their offer requiring you to pay these fees as a condition of the sale. This is a common approach for buyers to recoup such costs and could result in a similar financial outcome for you, with the added risk of missing out on potential buyers from the outset.

 

2.  Without an explicit offer of compensation, buyer brokers might request higher fees for bringing clients, potentially exceeding the amount you would have initially offered, making the transaction more unpredictable and costly.

 

Ensuring a smooth sale requires collaboration between the real estate professionals representing both parties. As a seller, you likely want to avoid complications that arise when a buyer is not professionally represented, as this can lead to negotiation issues and a problematic transaction process.

 

Our primary goal is to ensure a seamless transaction with the highest net proceeds at closing. This is achievable only when the entire brokerage community is incentivized to bring every qualified buyer to your property, thus driving up the sales price. Offering compensation to the buyer's broker is the most effective way to achieve this outcome.