When selling your home, you have many decisions to make—including whether to offer compensation to a buyer’s agent. This guide breaks down what an offer of compensation is, how it can benefit your sale, and factors to consider when deciding whether to make one.
What Is an Offer of Compensation?
An offer of compensation is when you, the seller, or your agent agree to pay a buyer’s agent for bringing a buyer who successfully closes on your property. This payment helps reduce buyers’ out-of-pocket expenses, which can be crucial for first-time buyers, lower- to middle-income buyers, and those from underserved communities.
Why Make an Offer of Compensation?
Offering compensation can attract more potential buyers by making the home purchase more affordable. It can also incentivize buyer agents to show your property to their clients, increasing visibility and competition.
Is Offering Compensation Mandatory?
No. It’s entirely your choice. Work closely with your real estate agent to determine whether offering compensation aligns with your selling strategy.
Does My Agent Need My Permission?
Yes. Your agent can only offer compensation to a buyer’s agent with your written consent and approval of the amount.
How Is an Offer of Compensation Communicated?
If you choose to make an offer of compensation, your agent can share this through various marketing methods, such as:
Flyers and signs
Brokerage websites and social media
Direct communication with buyer agents
Note: Offers of compensation **cannot** be listed on Multiple Listing Services (MLSs), which only compile home listings.
Is Advertising the Offer Required?
No. Advertising is optional. While promoting the offer can help attract buyers, you can choose to negotiate compensation directly during the purchase agreement process.
What Are Seller Concessions?
Seller concessions differ from offers of compensation. They involve covering specific home-buying costs for the buyer, such as transaction fees or property repairs. This can make purchasing your home more accessible.
Which Option Is Best for Me?
Deciding whether to offer compensation depends on your goals and market conditions. A Sibcy Cline REALTOR® can guide you through the process. They are bound by the REALTOR® Code of Ethics to put your interests first, helping you develop a selling strategy that works best for you.
By understanding your options, you can make an informed decision that supports a successful home sale.
Getting an offer is an exciting moment! Arriving at an agreed-upon sale price is the main objective, but there are many topics and tactics involved in contract negotiation.
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