Is the amount the buyer’s REALTOR® is offered (aka cooperating brokerage commission) – is it important?
My belief is that it is important. The offered cooperating brokerage commission is the incentive for all REALTORS® to bring their buyers to your home. You will note in Part I, that about 37% of buyers are introduced to a property via their REALTOR®.
Right now there is also a large push for REALTORS® representing buyers to obtain “Buyers Agency Agreements,” which specify compensation (for example, 3.0%100k + 1.5%balance). If the cooperating brokerage commission being offered is less than what the REALTOR® and the buyer have agreed upon it is up to the buyer to make up the difference.
The buyer is looking at two $600,000 homes: In the first scenario the buyer does not have to pay their REALTOR® (high cooperating brokerage commission offered by seller) and in the second scenario they need to pay their REALTOR® $7,500 (cooperating brokerage commission does not meet amount set out in “Buyers Agency Agreement”) – the second scenario may be less desirable to the buyer especially if they have limited funds available for a down payment.
A low cooperating brokerage commission can at times have unintended consequences.