For a comprehensive look at the specific changes, we recommend you read this summary.

As you consider selling what is most likely your largest asset, it is essential to understand the role of your real estate agent and all associated fees. Specifically, we want to be clear and transparent about:

• the services we provide;
• how much we are paid;
• how we get paid;
• how we share those fees with other agents;
• and why.

Please read on to learn more.

An Overview of Compensation

The first thing you should know is that you have choices regarding compensation, which is always negotiable—you can choose the levels of service and compensation you desire and select a listing broker accordingly. Before you sign a contract with us, we will discuss the services we provide, as well as our fees. We will also discuss how much you would like to offer to compensate a buyer broker.

The second thing you should know is that there are no standard commissions. The free market organically establishes fees within local real estate markets based on service, competition, and what the market can bear.

The third important concept to understand is that our market operates with a Multiple Listing Service (MLS), which consolidates listings across brokerages rather than forcing buyers to go from agency to agency to search for homes—a time-consuming and impersonal process. Seller and buyer brokers cooperate freely, sharing information within a highly structured platform of complete, transparent, and accessible data. Sellers may also make explicit any offers of compensation to buyer brokers.

Seller Agent Compensation

Our fee is 2.5% of the net sale price of your home. Our full services are outlined elsewhere, but generally we provide essential guidance as you navigate the legal, financial, and logistical aspects of your sale. We are paid only if the home sells, and our fee comes from the proceeds of the sale.

Buyer Agent Compensation

You have the option of also offering compensation to the broker who supplies a buyer for your home. Why would you choose to do that? There are two overarching reasons.

1. When brokers share their inventory with each other, sellers have access to the largest possible pool of potential buyers, and buyers have access to the greatest number of housing options in one place. But what if the buyer broker is not likely to get paid out of the proceeds of the sale for their part in the transaction, making the buyer responsible for that payment? The unfortunate answer is, their buyers may choose not to view your home. Fewer showings = a lower sale price.

2. What about having the buyer pay their representative directly? There are a few reasons this may not be in your best interest:

• If buyers have to pay commission out-of-pocket, in addition to a downpayment and closing costs, fewer buyers will be able to afford your home. It is important to note that as of today, mortgage lenders do not allow compensation to be financed as a part of the home loan, which means this is a real barrier for many buyers.

• Without guidance, buyers may not be prepared to act, and may not realize what they need to pay to successfully bid on your home. A buyer broker will encourage clients to view a home they might have overlooked, help them envision possibilities, and provide reassurance and guidance, especially to first-time home buyers.

• The transaction will go more smoothly with a professional assisting with due diligence, attending to the mortgage process, and keeping things on track—resulting in a lower likelihood that the deal falls apart and you have to go back on the market at a lower price.

Summary

You have options for compensating both your listing broker and the buyer broker who completes a transaction with a ready, willing, and able buyer. Our recommendation is that it is in your best interest to offer compensation to buyer brokers out of the proceeds of your sale. Please note that our compensation is not affected by this decision, so this recommendation is based on maximizing the value of your home.

Contact the Liz & Ellie team, and we'll answer all your questions.