If you have not heard, there is a new real estate service called OpenListings that helps buyers buy homes without paying any commission. But wait, I thought buyers do not pay commission to buy a home, so it is already free. How can a service save a buyer money on something they do not spend money on? You are really going to love this if you are getting ready to sell your home.
Unlike the rest of the planet, it is customary in the US (and Canada) for the seller to pay for the buyer’s agent. I know that does not seem fair. It is like having to pay for the lawyer of the person suing you. In any event, if you want to sell your home and you do not want to bring down the wrath of the entire real estate community, you will offer the customary 3% commission to pay for the buyer’s agent. So, for example, if you intend to sell a $500,000 home, you have to sacrifice $15,000 of your hard-earned equity so that the buyer of your home can receive a free service that benefits only them.
What this clever new company, OpenListings, discovered is that it does not require $15,000 to help a buyer buy a home today. Not with all this new technology stuff like computers, smart phones and the Internet. OpenListings thinks $5,000 is a fair price to pay to help a buyer buy a home. And what does OpenListings intend to do with the other $10,000 you set aside to help the buyer pay for their agent? They are giving it to the buyer. That’s right. Whether you know it or not, without your say so, you just lowered the sale price of your home to $490,000. How does that make you feel?
So, as a home seller, how do you combat this distasteful practice of involuntarily lowering the sale price of your home? The good news, if you are getting ready to sell your home, is that OpenListings is exactly right. Five thousand dollars is a fair price to pay to help a buyer buy a home—even if it is a million dollar home. And therein lies the solution.
When selling your home there is no law that says you have to offer 3% commission to the buyer’s agent. You can offer any amount you want (including offering nothing). And it does not have to be a percentage. You can offer a fixed amount, say for instance, $5,000.
The solution here is a simple: offer only $5,000 for buyer’s broker’s commission and then direct all the buyers to OpenListings (which is only available in California right now). You maybe forced against your will to have to pay for the buyer’s agent, but you sure as hell do not need to give any extra money directly to the buyer. Of course offering “only” $5,000 for the buyer’s commission will severely limit OpenListings ability to attract buyers, since they use the “extra” money as incentive to use their service. But that is their problem not yours.
At a time when everyone from Redfin to OpenListings to Help-U-Sell is screaming that a fair price for a seller to pay for the buyer’s agent is about $5,000, why would any home seller pay more than that? Just say no NO! overpaying for buyer’s agent’s commission. And if you are really courageous, you can just say NO to paying for it altogether. To lean how to be courageous when you sell your home, visit ReaListing.