Buying Real Estate

Why Do Sellers Pay Buyer Agent Commissions?

Buyers have been convinced over decades of marketing that buyer agents are "free".  Some members of the National Association of Realtors continue to perpetuate this misconception in the hopes of maintaining the status quo.  Most firms charge between a 5% to 6% commission to the seller.  The firms then offer to split those commissions evenly with buyer agents or if there is no buyer agent they will keep the entire commission for themselves.  As a result, the seller ends up charging more for their home in order to offset the fees needed to pay the buyer's agent.  

Flat Fee's model challenges the status quo in an effort to make the process fairer for sellers.  Flat Fee charges sellers $3,500.  Unlike most firms, Flat Fee does not get paid more if the buyer does not have their own agent.  Flat Fee collects its fee of $3,500 at closing when the house sells from the proceeds collected by the seller.  

Flat Fee's clients do offer buyer agents commissions.  While we would prefer that our clients did not have to offer buyer agents commissions and would prefer that the buyers paid their own agents directly for their services, Flat Fee would not be able to compete under the current market conditions if our clients did not conform to the system currently in place and offer buyer agents a commission apart from our flat fee of $3,500.  

There is a class action lawsuit currently working its way through the courts that may change this and allow Flat Fee to be competitive without requiring our clients to offer buyer agents a commission.  Flat Fee's clients have experimented with offering below market rate commissions to buyer agents in the past but the resistance from other firms and agents was stiff and the reactions from some agents were downright nasty.  We hope this lawsuit will bring consumers greater choice and options for using alternative models like Flat Fee's and in the end save consumers a lot of money.