Everyone thinks that commissions will be negotiated with the offer. On the surface, it seems like a reasonable solution, but it will depend on whether the listing agent will stand up for their fellow agents getting paid, or wimp out and hide behind the seller.
The conversations will go like this:
Listing Agent: We finally got an offer on your $3,000,000 home!
Seller: How much?
Listing Agent: $2,900,000!
Seller: LOWBALLER!
Listing Agent: Well, we’ve been on the market for two months so buyers tend to come in lower.
Seller: Counter $2,980,000. I’ll pay his 2.5% commission at that price.
Listing Agent: Ok, I did that and they countered $2,950,000.
Seller: That’s ridiculous. But I’ll take it and penalize the agent instead. Pay him 1%.
Listing Agent: Good idea – you actually come out with MORE money that way!
Listing Agent to Buyer Agent: You got your price!
Buyer Agent: But I got screwed on the commission!
Listing Agent: Sorry, dude, but the seller insisted. Get it from your buyer!
Will agents stand up for one another? It’s doubtful, especially when ‘negotiating the commission with the offer’ literally means the commission paid by the seller could be anything, including zero.
Until the end of July, the commission rate offered by the listing agent in the MLS is set – the listing agent doesn’t get to change it later, which is a great relief to the buyer-agents.
But after July, the burden is going to be on the buyers to pay their agent’s commission too. Higher prices, higher rates, substantially more closing costs, and unrelenting sellers…..how much more can they take?
