How to Manage Seller Expectations Around the New Commission Sharing Rules

​​This is an approximate transcript from a recent coaching call with an agent who closes 100+ deals a year.

My Seller said, “I’m willing to pay your commission, but I’ve heard that I don’t have to pay the buyer’s broker. If that’s true, that could save us a lot of money.  And someone who can afford our house will probably be paying cash anyway, won’t they?”

I had anticipated these “objections” and had done my homework on current listings and pending sales in this price range. There were 15 current listings in this million dollar price range, and every one of them was offering compensation to the buyer’s broker. And there were 12 pending sales, 9 of which had sold with conventional mortgage financing. Only three out of 12 buyers paid cash.

I remembered Floyd taught me to take everything with me on a listing appointment, so I had all the market data with me in a folder. Better to have it and not need it, than to need it and not have it. 

I said, “It’s true you don’t have to pay the buyer’s broker commission, but in your case, you might want toanyway. May I explain what I mean?

“Oh, by the way, commissions have always been negotiable, and they still are. The new rule you are referring to is only about advertising compensation in the MLS. We used to be able to, and now we cannot. So, if I have a buyer who wants to see a particular listing, in order to find out whether that seller is offering to pay me to show and sell their house to my buyer, I could call the listing agent and ask, or visit their company website, or keep my fingers crossed and include it in the offer.

“That’s exactly what I did in preparation for our meeting here tonight. I found out that every single one of the sellers of these current listings is offering anywhere from ___% to ___% incentive to buyer’s agents. 

“But that’s not all I found. Here’s the kicker. 9 out the 12 pending sales were financed with conventional mortgage loans. Only 3 cash sales.

“This is how we have been doing business for over 150 years. The buyer brings the funds to the table and the commissions get paid out of those funds. If all we have is a seller and a house, but no buyer to bring the funds, we have no sale. 

“It’s true you don’t have to offer compensation to a buyer’s broker, but can you see why you probably want to?”

The bottom line?

Anticipate this commission objection and go prepared to answer your sellers when they question you about the new commission rules. And they will, because they have been hearing about it. The new rule doesn’t say sellers don’t pay the buyer half of the fee. It just says that we can’t advertise it in the MLS.

The same benefits and drawbacks apply to any seller who suggests that a discounted commission is in their best interest.