Does the seller have to pay the buyer’s broker? The short answer is no. The longer answer is what we are going to dive into in this blog about whether or not the seller has to pay the buyer’s broker compensation. I am sure you have heard about the National Association of Realtors settlement regarding the seller paying the buyer’s broker’s compensation aka a commission. For all intents and purposes, it upended the real estate influencer market across the nation this last year. But for those of us who live and work in Western Washington, this was not new to many of us.
In this blog, we are going to talk about the options the seller has regarding the buyer broker’s compensation.
The Options The Seller Has To Offer The Buyer Broker’s Compensation
- 1st Option: Ask the Buyer to Bring an Offer of Buyer Broker Compensation to the Seller
- 2nd Option: Offer to Pay a Set Amount of Compensation
- 3rd Option: No Compensation For the Buyer’s Broker
Let’s dive in and get more detail.
Does the Seller Have to Pay The Buyer’s Broker?
First off, it has been optional to pay the buyer’s broker compensation forever in Washington state. In the Fall of 2022, our NWMLS made it even clearer that this was the practice on the listings forms. This last summer the NWMLS went an extra step to be even clearer with sellers what their buyer broker compensation options are. We have a whole blog for buyers regarding these changes here >
Below are more details regarding these options.
Option 1: Ask the Buyer to Bring an Offer of Buyer Broker Compensation to the Seller
Does the buyer have to pay the buyer’s broker? No, but you do have the option to ask the buyer to include buyer broker compensation as part of the overall offer. In this scenario, the buyer submits an offer of compensation to the seller as part of the overall terms of the offer. For example, the buyer might want the seller to pay for the commission, provide closing costs, and reduce the price of the home as part of their offer. The seller has the right to negotiate on all of these terms.
The Benefit
The seller has a cleaner negotiation with the buyer regarding all parts of the offer.
The Risk
The seller might not receive ANY offers because it is too ambiguous for the buyer. You have to remember that Seattle does not have a negotiation culture. People here would rather ghost a listing instead of negotiating on the price and/or compensation for a buyer’s broker.
Our Advice
The homes that we have noticed who opted for this option have stayed on the market longer than those who outright offered a fixed compensation for the buyer’s broker. We all know that the homes that stay on the market end up selling for less money than those that sell in a week or so.
Option 2: Seller Can Offer to Pay a Set Amount of Compensation to the Buyer’s Broker
Does the buyer have to pay the buyer’s broker? No, but you do have the option to pay a fixed amount of compensation for the buyer’s broker. This fixed amount can be a percentage of the sale or a fixed dollar amount.
The Benefit
The buyer and seller both have a clear understanding of where they are in the transaction before the buyer makes an offer. Buyers have a limited amount of cash available to make the down payment and also pay their buyer’s broker. Offering compensation clarifies the options the buyer has for your home.
The Risk
The buyer can still negotiate more compensation as part of their offer. Luckily, the seller always has the option of saying no as part of their negotiations.
Our Advice
Overall what we have seen is that most sellers are still offering compensation to the buyer’s broker. But the choice is the sellers to make. What we have been doing for our sellers is including the average compensation as part of the market analysis for the home. I also just talk through the scenarios with the seller so they can make an informed decision.
Option 3: No Compensation For the Buyer’s Broker
Does the seller have to pay the buyer’s broker? No! Absolutely not. The seller is not obligated to provide the buyer’s broker with compensation. Instead, the buyer needs to have additional money available to also pay their broker for services rendered. Buyers need to know this is a reality and budget accordingly.
The Benefit
The seller knows exactly what they should expect back from the buyer and “hopefully” save money in the transaction.
The Risk
The buyer can still bring an offer of compensation even if the seller has said they will not be paying the buyer’s broker. In addition, what we have seen anecdotally, is that homes that do not offer compensation have been hanging out on the market.
Our Advice
The bottom line is that it is up to the seller what they want to provide to the buyer and their broker. We will bring you all of the data for your neighborhood when we do a market analysis. This allows you to make an informed decision. It might be worth it to you to not offer compensation. Or the compensation offer might result in a higher sale. It is up to you!
Does the Seller Have to Pay The Buyer’s Broker? No, But….
The bottom line is that it is up to the seller to make an informed decision based on data. A seller might find that they will net out a higher sale if they offer compensation to a buyer’s broker. Or a seller might want to have buyers bring compensation as part of the offering. Regardless of what the seller decides to do, the buyer still has the option to negotiate compensation for their buyer’s broker.
Our best advice is to talk through the options with us and see which one fits your overall needs. The bottom line is that every home is different, every seller’s needs are different, and every market is also different. Hence a Diva meeting is your best bet to making the right decision for you and your household. Below are a few more details to dive into in case you want more information:
Other Seller Blogs to Help You Decide if a Seller Should Pay the Buyer’s Broker
- Start Here: Learn About the New Washington State Home Buyer Agency Law
- Download our Guide “How to Sell a Home in Seattle”
- Read the very detailed blog “Guide to Selling a Home in Seattle”
- Watch my video “A Top Producer Shares All The Secrets to Selling a Home in Seattle”
- Check out our blog “How Long Does it Take To Prepare a Home for Market”
- And last but not least read “How Much Does It Cost to Prep My Home in Seattle to Sell”
We are here to help. Our team understands that this process can take a year or two. Give us a call. Our Team loves helping people develop a personalized listing plan for their homes. Feel free to contact us directly at thediva@teamedivarealestate.com or call/text 206-271-0264.
