NAR Consumers: Seller Offers of Broker Compensation

As a home seller, you have a wide range of choices when deciding how to market your property. This includes whether you’d like to offer – or authorize your agent to offer – compensation to a buyer’s agent as a way to attract potential buyers. Here’s what you need to know as you consider your options related to offering compensation.

 

What is an offer of compensation and why make one? An offer of compensation is when you – the seller – compensate another agent for bringing a buyer to successfully close the transaction. Offers of broker compensation help reduce out-of-pocket costs for prospective buyers, which in turn may bring more potential buyers for the transaction. These costs can be especially significant for first-time buyers, lower- to middle-income buyers, or those from underserved communities.

 

Are offers of compensation mandatory? No. It is up to you to determine if making an offer of compensation is the best approach for selling your property. Agents who are REALTORS® are here to help answer your questions and guide you to make a decision that works for you.

 

As a seller, does my agent need my permission to offer compensation to a buyer’s agent? Yes. Your listing agent can only communicate your willingness to offer broker compensation to a buyer’s agent if they have your written approval and signoff on the amount.

 

What types of compensation can I offer? There are a couple options available to you as a seller to discuss with your listing agent. Both could include a flat fee paid directly to the buyer’s agent or a percentage of the purchase price. Beyond broker compensation, you could also consider offering a buyer certain concessions, such as covering closing costs, to make the total home purchase more affordable for them.

 

How will a buyer’s agent know if there is an offer of compensation? Offers of broker compensation can be advertised in many ways. If you approve an offer of broker compensation, it can be shared through common marketing methods such as flyers, signs, brokerage websites, social media posts, or simply through a phone call or email. Offers of broker compensation cannot be listed on any Multiple Listing Service system anywhere in the country.

 

Do I have to advertise an offer of compensation if I decide to make one? No, it’s up to you to decide. Advertising broker compensation can help get the word out to bring more buyers to the table, but you can also choose not to advertise and instead negotiate the offer in a purchase agreement.

 

You mention concessions – what does that mean? A seller concession is different than an offer of broker compensation. It’s when a seller covers certain costs associated with purchasing a home for the buyer. Concessions can make home ownership more accessible for buyers by reducing upfront expenses. These can cover things like some transaction costs, a home warranty, or property repairs.

 

As a seller, how do I know what compensation option is best for me? When you work with an agent who is a REALTOR®, you are working with a professional guided by ethical duties under the REALTOR® Code of Ethics, including the pledge to protect and promote the interests of their clients. Your listing agent will work with you to weigh your options, answer questions, and develop a strategy you are confident in.

 

✅ Please visit facts.realtor for more information and resources, and consult your real estate professional or attorney for details about state law where you are purchasing a home.

 

📣 REALTORS® are members of the National Association of REALTORS®

 

📚 Welcome to the Future of Residential Real Estate (Commissions Decoupled)
📚 Then and Now: Decoupled Commission and New Flow of Compensation
🔎 View the ‘Buyer-Broker Exclusive Employment Agreement’ example.
🔎 View the ‘Buyer-Broker Agreement to Show Property’ example.
🔎 View the ‘Residential Listing Contract - Exclusive Right to Sell’ example.
🔎 View the ‘Seller Compensation Addendum’ example.
📚 Homebuyers: Here's What the NAR Settlement Means for You
📚 Home Sellers: Here's What the NAR Settlement Means for You

 

📆 Schedule time with me to address any questions and concerns about buying, selling, and renting residential real estate in the Valley of the Sun (Metro Phoenix). 🏠 We'll get you where you need to go! 🚀

 

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