When selling a home there’s one overarching goal I strive for in every experience for my clients: get the most value for the property in the least amount of time.
So, how can that goal be reached for sellers today? Well, let’s take a look at what’s happening in the market. Right now, inventory is increasing and that can put downward pressure on pricing. It can also cause sellers to examine other ways to get the most value for their home given current market circumstances. I’ve been seeing a lot of headlines in the media about how sellers don’t have to pay “concessions” … by the way, “concessions” is the new buzzword for commission/compensation, which we’re not allowed to use anymore, particularly in a written contract between a buyer and a seller. Back to those headlines, the media has been reporting that sellers don’t have to pay concessions to a buyers’s agent … and if anyone thinks that’s how to save money on a transaction, I’d say think again.
It’s standard to pay buyer’s agent concessions and most buyers are not used to paying. In today’s market, where affordability is still impacted by higher mortgage rates and buyers are struggling to come up with downpayment PLUS these higher mortgage rates, you won’t find too many buyers willing to pay for the buyer’s agent. Now, I could see this circumstance happen if there’s a development opportunity or an off-market property where the seller says something like, “Hey, if you want this property, you’ll have to pay the buyer’s agent concessions,” but other than that, this simply isn’t the norm.
Just because we’re going to be operating with new rules of real estate doesn’t mean a magical light switch has been flipped and the transaction process will happen in a totally new way. Of course, there ARE changes that will happen because of these new rules. For instance, buyer’s agent concessions will not be mentioned in writing or in the listing contract, and buyer’s agents will negotiate how concessions are going to be paid, whether it’s through them, the seller or a combination of both.
As I’ve written about before, on the buying side, the concessions a buyer’s agent receives will be set when the buyer enters into a written agreement, basically hiring that agent to help them find their next home. This agreement outlines a specific concession percentage or amount the buyer agrees to pay the agent once they purchase the home. The seller could potentially pay some or all of this, but that will become a negotiated term between the buyer and seller.
If the seller says, “Sure, I’ll pay the buyer’s agent concessions …” The home sale continues on as it did before, with this taken from the seller’s net proceeds from the transaction.
If the seller says, “No thank you, not paying …” The buyer and the buyer’s agent will have to work something out if this is truly the home the buyer want, or find another home where the seller is willing to pay concessions.
Stay tuned next week for more about how these new rules of real estate impact the transaction from the buyer’s side …
For now, know that if you want a successful selling experience (sell for the most value in the least amount of time), the best way forward is to work with an experienced real estate professional. An ideal agent should not only be comfortable with all the complex changes happening in the industry but also fully understand the nuances of how to navigate these changes and bring about a successful sale.
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Andrew Manning • REALTOR® • Berkshire Hathaway HomeServices California Properties • DRE: 00941825 • 818-380-2147 • andrew@andrewmanning.com