Why You Should Never Change the Buyer Agent Commission After Listing

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In this video, we'll explain why sellers should never change the buyer agent commission offered in the MLS after a property has been listed for sale.

For starters, it's extremely ineffective if you wish to attract more attention later on by raising the buyer agent commission. Typically sellers make this mistake by thinking they can get away with offering a low buyer agent commission because they believe the market is hot or their property is especially unique. When this doesn't work out, they get desperate and then want to raise the buyer agent commission to something market rate.

However, at this point it's too late for this to be effective. That's because there's no way for buyer's agents to be notified that the commission rate has changed for a listing (i.e. there are no search alert options for commission rate changes), and often times buyers' agents will check out a listing and the co-broke offered when it's first listed.

Remember that when a listing is first listed is when it gets the most views due to automatic search alerts being set up and such. As a result, if a buyer's agent notices in the beginning that the listing is offering a below market commission and decides to ignore it, there's very little change to re-attract that buyer agent's attention later on when you raise the commission.

But what about wanting to actually lower the commission offered to buyers' agents later on after you've already listed? Well, as we discuss in this video, the reason that we don't allow this is because it is fraught with litigious risk for all parties involved. That's because many MLS associations, such as the REBNY RLS, protect buyer's agents by ensuring that they are eligible for the former, higher commission rate if they showed the property (or inquired on the property etc.) prior to the decrease in the commission rate. As you can imagine, this might become a litigious and contentious issue if a disagreement arises later on about when a buyer's broker actually showed or inquired on the property. Therefore, no listing broker would reasonably allow a seller to lower the commission offered to cooperating brokers in the MLS after a listing has been posted, especially since the listing broker is contractually on the hook for the commission via the MLS!

Please leave us a comment and let us know your thoughts, and any tips of your own!

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Hauseit Group LLC, Licensed Real Estate Broker
Tel: (888) 494-8258 | https://www.hauseit.com
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