IIf you’re planning to sell your house or are already in the process, you’ve likely heard about upcoming changes in how your home can be listed and marketed, particularly regarding commission offers to buyers’ agents.
Starting August 17, 2024, your agent will no longer be able to include an offer to compensate buyers’ agents in the Multiple Listing Service (MLS). The MLS, a local marketplace used by both buyer and listing brokers to share property information, will exclude such compensation offers.
Some sellers might think this means they can’t offer compensation to buyers’ agents at all. However, a recent National Association of REALTORS® article clarifies that you can still offer compensation to attract buyers. To do so, follow these steps:
- Your agent must clearly disclose any compensation offer to buyers’ agents and obtain your approval.
- The disclosure must specify the payment amount or rate before making the offer.
Although the MLS cannot include the compensation offer, you can promote your listing on social media, flyers, and websites.
Remember, offering compensation to buyers’ agents is optional. Some sellers may choose not to pay a commission..
While that may sound appealing, and like a way to save or make more money on the sale of your home, there are some things you might want to keep in mind before taking that approach.
It Could Cost You More Time and Money Than It Saves You
On the other side of the equation, buyers will now be required to sign an agreement with any agent who is showing them even a single house. Their agreements will include an amount of compensation the buyer agrees their agent is entitled to earn, and, technically, the buyer is agreeing to pay that amount if the seller of the house they want to buy isn’t willing to pay it.
But before you opt to let the buyer be responsible for paying their agents commission out of their own pocket, here are 2 reasons you should consider offering to pay a commission to buyers’ agents:
- It could impact how many buyers make offers on your house. One of the best ways to ensure you get the highest price for your house, and sell it as quickly as possible, is to make sure every buyer in the market for a home like yours comes to see it and wants to make an offer. If you’re not offering to pay a commission to a buyers’ agent, that may eliminate some of your potential buyers who are only focused on listings that will cover the commission of their buyers agent.
If you’re competing with other houses for sale in your area, buyers could choose to buy a house that the seller is offering to pay the commission because it makes more financial sense for them, rather than paying their agent directly out of pocket.
- It could lead to a longer time on the market, which often impacts the final sales price. Sellers have become used to houses selling extremely quickly over the past few years, due to a lack of inventory, but that’s not always the case. And whether it’s right, wrong, or somewhere in between, the amount of time a house sits on the market impacts how buyers think and feel about the value of a property. The longer a house sits on the market, the more buyers think something must be wrong with it, and the less they think it’s worth.
In the past, the usual reasons a house sat on the market for a long time were due to a seller pricing it way too high, or not making it easy for buyers to come see. But if a seller isn’t offering a commission to buyers’ agents, it could increase the days on market if it eliminates the number of interested buyers, which could lead to a lower sales price. So, any attempt at saving money by avoiding a commission could end up costing more than it saved.
The Takeaway:
Starting August 17, 2024, your listing agent can’t include an offer to compensate buyers’ agents on the Multiple Listing Service (MLS), but you can still offer compensation as long as it’s disclosed and approved by you. While not offering to pay buyers’ agents might seem like an appealing way to save money, it could actually cost you in the long run by reducing the number of offers and potentially lowering your final sales price. Offering compensation can make your listing more attractive and help sell your house faster, and for the highest price possible.
