Just to get up to speed on this particular post, commissions for Realtors are paid by home sellers. A listing agent and seller come to agreement on a total percentage to sell a home. The listing agent then in turn offers a percentage of that, usually around 2.5% – 3% to whichever ”buyer agent” brings the buyer that purchases the home. This percentage is referred to as BAC or a “Buyers Agent Commission”. The BAC is noted in every listing in RMLS for all agents to see but the information is not shown publicly.
Why do you need to know? If the average BAC is 2.5% and your listing agent is offering 1.5%, the attraction of agents to your home is minimal. Why? Because by the time the brokerage firm takes their cut, uncle Sam his, and all the other expenses I won’t detail here, a 1.5% is not going to compete with those that are higher. I’d say 75% of agents at listing appointments fail to discuss this and in fact are counting on a seller not asking. Currently RMLS listing forms do not require a listing agent to disclose this to a seller. (we are pushing for a change but it will not likely happen anytime soon).
Now that that is out of the way, years ago I remember hearing an agent say she wouldn’t show homes offering less than a 2.5% BAC which is a very common BAC, I personally thought and still think that was unethical, if your buyer likes and wants that home you should show it no matter the BAC however there are a LOT of agents out there like her that wouldn’t show that particular home because of how little they would get paid to sell it, and admittedly when we see BAC’s under 2.5% we cringe too. However our buyers don’t need to know that, they just need to know if they like the home and want to see it; we will show it.
I should mention that agents are not allowed to exclude homes to show buyers based on BAC; but this doesn’t stop some from doing it anyway.
Anyhow, we think it’s important for sellers to be armed with this information, to know to ask the question about the BAC and to know that if you’re primary criteria for hiring a listing agent is the lowest percentage possible to sell, the listing agent has to pay both themselves and the other agent, so the lower the percentage you pay the more likely you are to end up with a low BAC resulting in agents not wanting to show your home… which could cost you more than what a higher percentage to sell would have in the end (lower sale price via lower motivation to sell it).
Scott McDonald ~ Your Portland Real Estate Agent
Tags: bac, buyer agents, Commissions, listing your home