Why a seller may opt to consider compensation to the buyer broker or concessions to the buyer

When a property is listed for sale, the seller and their agent work together to create a strategy that positions the property to its best advantage when it goes to market. The considerations are many and include but are not limited to marketing campaigns/strategies, preparing the property to show in its best light through repairs, refreshes, or staging, thorough evaluation of comparable listings and sales, and so much more.

Another consideration the seller may wish to weigh carefully is whether or not they would consider an offer of compensation to the buyer's broker or a concession to the buyer.  

This is an essential evaluation because some buyers are simply not flush with cash. In the new real estate landscape, Realtors® and MLS participants must enter into a written agreement with buyers before touring the property. 
 
Based on the written agreement, the buyer would be responsible for paying their broker for professional representation.  It would benefit buyers who cannot fulfill that obligation to receive financial assistance from the seller. Buyers must be prepared to pay lender, appraisal, escrow, and title fees, as well as inspections, potential repairs to the property, home warranty protection, and the list goes on.
 
Suppose a seller is willing to consider offering either a contribution to the buyer’s obligation to pay their broker or a concession crediting the buyer directly at closing toward costs and fees. In that case, it may appeal to a buyer who might otherwise not have the liquidity to move forward with the home purchase. 
 
Another reason a seller may wish to consider paying the buyer broker would be to forestall the risk of a “self-represented” buyer.  Buyers who do not work with brokers may not fully understand the transaction process, which may lead to delays and misunderstandings during the negotiations and throughout the escrow process.  In addition, some sellers have indicated concerns about a buyer not being able to fulfill their obligation to pay their broker at the last minute, which could derail the closing.
 
These are just a few factors that a seller may consider, Consumer Choice is the order of the day.

The Realtor’s fiduciary duty to their client is to provide options, discuss the pros and cons, and let the client decide. 

Pete Sabine
Real Estate Consultant
Call or text 925.787.2548
[email protected]
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Compass
DRE #00889760