Presenting Options to Buyers + Sellers
While contracts are going to vary from state to state and brokerage to brokerage, the concepts below should still apply. The key takeaway is to lead with the word, choices when having conversations about commissions. Consumers should have choices. Each of the below are sample emails from our 50+ Email Templates. If you don't already have our library of email templates, click here.
I am a firm believer that the commission conversation should be had directly and following up with an email is always advisable.
SELLER CONVERSATION
Bob, when it comes to commission and how you decide to compensate a buyer's agent who brings you the right buyer, it is all about choices. Ultimately, it is your decision on how we proceed, but here is my opinion.
When you put your home on the market, logic says that the most exposure will yield the best returns, which initially means showing activity and eventually means financial return. As a listing agent, our job is to provide the most exposure to bring the highest number of qualified buyers through the door, netting an offer and perhaps more than one offer.
When you eliminate paying a Buyer Agent Commission(BAC), you could limit the pool of potential buyers who could purchase your property. I understand that you may now be asking why a buyer couldn't just pay their own broker commission. I get it. That is a great question, but the reality is that many cannot afford it, and current lending guidelines prevent a Buyer Agent Commission from being a buyer line item expense and included in the mortgage, making it an out-of-pocket expense for buyers if it is not a line item on the seller side of a closing statement. A buyer who cannot afford representation has three options-
Limit the homes they can purchase to those offering a BAC.
Represent themselves.
Seek out dual representation from listing agents.
In my opinion none of the above options are good for you. We do not want to limit the number of potential buyers that come to view your home. An unrepresented buyer with little or no knowledge about the buying process will likely increase the number of hurdles we encounter throughout the transaction, potentially creating unwanted liabilities or exposre for you. You may not be interested in limited representation, which would be the case if we were to represent both you and the buyers in the sale of your home.
Before making a decision, I would ask you this—
If we could net you fair market value for your home, would paying a finders fee to an agent that brought us a qualified buyer willing to pay your price and meet your terms make sense? If so, I suggest offering a portion of the total commission to that agent. Being open to this does not mean that every offer presented to you will include the payment of the BAC. This will simply be a term that we negotiate in the offer just as we negotiate price and repairs.
Sally, thank you again for reaching out. We are thrilled to have the opportunity to represent you in your upcoming home purchase. We are following up on our conversation regarding our Buyer Representation Agreement, agency disclosures, and advisories. Per our conversation, we will be working with you work as a Buyer’s Agent, representing your interest. In some situations, dual agency may arise. As a reminder, you have the choice of whether you would like us to work in this capacity.
Please read the attached explanations carefully and make the appropriate selections where needed. Additionally, we have included a copy of the required Buyer Representation Agreement, which we discussed on our call. This binding contract lays out each party's obligations.
We are committed to finding and negotiating the best possible terms for the purchase of your new home. We can’t wait to get started. Here are a few things to keep in mind:
We will seek out properties beyond those you see online. We often canvas neighborhoods, contact other agents directly, network within our brokerage, and use social media to find off-market opportunities.
We are here to guide you through the entire home-buying process, from start to finish. Our experience and education will help you find the right home, negotiate the right terms, and navigate the nuances of the transaction timelines and liabilities.
We are your point of contact for any home you see online or driving through a neighborhood.
We will manage communication, contract negotiations, paperwork, and necessary steps to facilitate a successful closing.
You have access to our entire team, as we are all here to assist.
We will always provide honest feedback on properties, and market data on neighborhoods or specific homes.
At this stage, many of our clients ask us to remind them of how we are compensated for our services. We only get paid once we successfully close on a home for you. In our market, it is currently not uncommon for a Seller to offer a Buyer Agent Commission (BAC). This is a negotiable term of a Purchase and Sale Agreement, just like price and repairs. We aim to negotiate a suitable BAC in your Purchase and Sale Agreement. If the Seller is unwilling to pay this or only a portion of our fee, you have several choices.
You can decide not to purchase the home as we cannot come to terms with the seller.
You can pay our commission or the difference between what the seller will pay and our agreed-upon fee, as set forth in our Buyer Representation Agreement.
We could renegotiate the terms of our Buyer Representation Agreement.
Ultimately, purchasing a home is likely to be one of your biggest investments you will make. We are confident that we will find you the right new home with the terms that make the most sense for you.
