Buyer’s Agent Commissions

In Texas, about 99% of all homes are listed with 3% being offered to buyer’s agents. This is one area where it doesn’t pay to economize. Most sellers typically list their home for a price that includes 3% room for negotiation anyway, so you can simply apply that to the commission and not negotiate the price when a buyer’s agent is involved. If you still insist on only offering a lower commission, at least one of the following WILL happen:

  • Your house will get fewer showings and take longer to sell.
  • Some agents assume it’s 3% without looking at the listing carefully, and write their offer to include a 3% commission anyway. Then there’s the problem of restructuring the offer, which usually ends up irritating the agent as well as the buyer. The result is you end up agreeing to pay the 3% anyway, or the agent steers the buyer to something else.
  • Most agents who DO notice the lower commission offered, and are still willing to show the house, will usually have a written agreement with their buyers that guarantees the agent a 3% commission. The buyer then has to pay his agent the difference in the commission, so in the buyer’s mind your house is actually that much more expensive. It’s just more complicated and tends to annoy the buyer.
  • Almost all sellers who start with 1% or 2% eventually increase the commission to 3% after the house doesn’t sell, and they miss out on the first few weeks when a listing is fresh and buyers are more anxious to make offers.

As far as offering MORE that 3%, or offering a bonus to the agents, don’t do it! Take it off the price instead. Agents and buyers never search for properties based on what the commission is, and the buyer decides what house they want to buy, so it’s just a waste of money.