Offering zero to the buyer's agent and pricing $12k lower instead

Question

Numbers first. Selling a 3/2 at $480k, listing agent wants 2.5% for herself and recommends we "be prepared to" cover 2.5% for the buyer side, so $12,000 each side, $24,000 total off the top.

My pitch to her was: offer nothing to the buyer's agent, list at $468k instead, and let the market sort it out. Same net to me, better headline number, and buyers who show up unrepresented cost me nothing extra. She pushed back hard and said I'd be "filtering out" half the buyer pool and it'd cost me more in days on market than I'd save.

I can't tell if that's a real mechanic or if she's protecting the cooperating-broker habit. What actually happens to a listing that offers zero, and can a buyer even finance their own agent's fee if they wanted to?

Rena Expert · Accepted Answer

The mechanic she's describing is real, though her framing is soft. Take the financing piece first, because it's the load-bearing part of your plan.

Most buyers cannot roll their agent's fee into the mortgage. The fee generally isn't a financeable cost, so a buyer who owes their agent 2.5% has to produce that in cash on top of down payment and closing costs. A buyer at $468k with 5% down is already writing a check near $40k. Adding $11,700 is what actually thins your pool, not agent preference. The workaround the market uses is a seller concession, which the buyer asks for in the offer and which their lender may allow to be applied toward buyer-broker compensation. Concession limits vary by loan program and lender policy, so confirm in writing with the specific lender on the specific deal rather than assuming.

So your $468k listing doesn't avoid the $12k. It converts it into a concession request that arrives with the offer, and now you're negotiating it from a list price you already cut. That's the trap.

On days on market, run it against carrying cost. Debt service, taxes, insurance and utilities on a $480k house is plausibly $3,000 to $3,800 a month depending on your loan. Two extra months erases the entire $12k saving, and softer buyer competition tends to cost you on price too.

Whether you can advertise a general seller concession in the MLS depends on your local MLS's rules, and they differ. Some permit non-agent-specific concessions in the listing, some restrict how it's phrased. Ask your agent for the actual policy text.

Also, she has to get your written approval for whatever compensation is offered to a buyer's agent. Use that form as the negotiation, not the list price.

Rena Guide · Answer

Adding one definition for anyone reading this who hasn't hit it yet.

A seller concession is money you agree to credit the buyer at closing. It comes out of your proceeds, so a $468,000 sale with a $12,000 concession nets you the same as a $456,000 sale with none. Since the 2024 changes, a concession has become the usual route for a seller to cover the buyer agent's fee, because the offer of compensation can no longer sit in the MLS listing.

The thing that trips people up is that concessions are capped. Lenders and loan programs limit how much seller-paid credit they'll allow, and the cap moves with the loan type and the down payment. Anything above the cap either gets cut or has to be handled differently. Your listing agent should be raising this before you accept an offer, and the buyer's lender confirms the number in writing.

One more piece for @pike's situation. If you list at $468k on the theory that you're pricing the fee out, and then a buyer arrives asking for a $12k concession anyway, you've spent your negotiating room before the conversation started. Pricing and compensation are two separate levers and it's easier to hold both if you don't collapse them into one.

aaron_fitz10 · Answer

The concession-cap thing is what got me. I assumed a seller could credit whatever they felt like and the lender just watched. Turns out the cap can be 3% on a low down payment conventional loan, which on a $468k purchase is barely above the buyer-agent fee on its own before you touch closing costs.

megan_doyle15 · Answer

Wait so is the buyer's agent fee still coming out of the seller's money in practically every deal? Then what actually changed other than where the number is written down?

aliyah_b · Answer

@rigging the number moved from advertised-in-advance to negotiated-per-offer. That sounds small and it isn't. Advertised meant every buyer's agent knew their fee before showing up, so nobody asked. Per-offer means it's on the table with everything else, and a seller with three offers can push it. @pike's mistake is he tried to win that fight by cutting list price, which is the one move that gives away the ground you'd fight on.

Offering zero to the buyer's agent and pricing $12k lower instead

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