Buyer Broker Compensation Discussions
"Compensating the other half of our sales team"
As a seller, you have the option to offer compensation to the broker who represents the buyer on your sale. Although not required, there is significant value in compensating them for their hard work. The standard offering in today’s market ranges between 2.5 and 3%. Below is the most recent year to date data pulled from closed sales in King County, highlighting the cost/benefit relationship between the two.
Some additional thoughts to consider:
- Historically, Buyers have not had to pay out of pocket for the services of their Broker or consider the significant impact that may have on their ability to purchase.
- As of Jan. 1, 2024 Washington State has REQUIRED all brokers to execute a Buyer Agency agreement before providing services to their buyer clients. Those contracts specifically outline the services agreed to and corresponding compensation to be paid.
- Most Buyer Agency Contracts in our local market have compensation clauses that range from 2.5 to 3%
- If the buyer broker compensation being offered by the seller is less than what their Buyer Agency Agreement stipulates, the buyer will need additional funds beyond their down payment and closing costs to cover that gap.
- In many cases, buyers simply don't have the additional funds to bridge that gap. Even if they do, it can have a dramatic impact on their ability to qualify for financing or significantly reduce their purchasing power.
- Specific demand for a home is what drives the selling price. Reduced compensation and the potential hurdles or roadblocks created for buyers could significantly limit your buyer pool and cost you far more than what you thought you would "save".
