Three listing proposals on a $385k house. What am I comparing?

On the compensation piece, since I run listings on a small team: leaving it open isn't neutral. Buyer agents are working under written agreements with their clients now, so before they show a house they generally want to know what the seller is willing to contribute, because if the answer is zero their client has to make up the difference in cash. Most sellers in my market still cover it and just communicate the number outside the MLS, by phone, in the agent remarks where the MLS allows it, or on a compensation page the brokerage keeps.

That doesn't mean 2.5% is the right number. It means "we'll figure it out later" costs showings, and showings are the only input your friend controls.

Dumb question that I want the answer to anyway: if Agent A gets written approval for 2.5% to the buyer side, is that locked? Or can the seller still say no to it on a specific offer? I genuinely don't know how binding those forms are and I assume it varies by state form.

@compass, the forms I've seen are an authorization for the agent to offer a stated amount, and any specific offer still comes to the seller to accept or reject with whatever compensation terms are in it. But the wording differs by state association form, so your friend should read the one in front of her rather than trust my summary.

@beacon, the number that matters most in your post is 99.1% on 14 sides. That's a real data point. Two grand of commission difference is noise next to a pricing miss.

Everything in this thread is new to me but the flat fee option confuses me. If her friend handles showings herself, doesn't she also handle the disclosures and the inspection response and the appraisal? That sounds like a lot of Sundays for $6,000.

I've used both models. Flat fee worked for me on a townhouse in a complex where three units a month traded and the price was basically set by the last comp. There was nothing to negotiate. It did not work on a house with an odd floor plan where the whole job was talking buyers into the layout.

Her house sounds like the first kind. Cookie cutter suburban, 20 day market, tight comp set. That's the situation where the flat fee has the best odds.

@keystone that's the most useful frame in here. The house type decides the model, not the price.

I'd push back a little. "Similar stuff has been going 375 to 395" is a $20k spread, which is 5%. That's not a set price, that's a range where somebody has to decide where in it this house sits and defend it. Somebody with 14 closings and a 99.1% ratio has probably made that call more recently than my friend's brother-in-law who has a license.

Ask Agent A and Agent C the same question: what would you do if we're at day 18 with eight showings and no offers. The answers will not resemble each other and that's the thing your friend is actually buying.

What I still can't square is why the 2% agent is the middle option in reputation as well as price. Cheap listing side plus no data is worse than either extreme.

Cut Agent B. Then it's a real choice.

Thin margins are my whole life so I'm sympathetic to the flat fee, but I've watched a self-managed listing lose $11k in an inspection negotiation because the seller answered the buyer agent's email at midnight and conceded before she had a contractor number. The savings evaporated in one reply.

@flint that's the risk I'd weigh, though it's an anecdote and so is the 99.1%. Fourteen sides is a small sample. If four of them were her own listings she priced to sell fast, the ratio flatters her.

@beacon, ask her for the list price history on all fourteen. Original list, any reductions, final. Ratio against the last list price hides the cuts.

Went through this a second time. So the buyer's agent compensation is a separate number from the listing commission and the seller approves it in writing, and it can't be advertised in the MLS anymore. Do buyers ever just pay their own agent directly?

@juniper yes, some do, and their agreement with their agent says what they owe regardless of what the seller offers. The seller contribution reduces what the buyer pays out of pocket. That's why a listing that offers nothing narrows the buyer pool to people who have that cash on top of the down payment.

@beacon, run the arithmetic on the downside rather than the savings. At $385k, 1% is $3,850. If the flat fee route sells at $378k and the full service route sells at $387k, the flat fee cost her $2,900 net of the fee difference. The whole decision lives inside a 2.5% price swing, and nobody in this thread can tell her which way it swings.

Something nobody's priced: her time. Showings on a suburban three bed in a hot pocket could be 20 appointments in ten days, plus lockbox coordination and feedback calls. If she works full time, the flat fee is a part time job for two weeks.

Small point from the landlord side. If the house is vacant when it lists, the flat fee is more workable. If she's living in it with kids and a dog, self-managed showings will grind her down by day five and she'll start accepting worse offers to make it stop. I've watched that exact thing happen to a seller I bought from.

@cairn that's the reply I'd screenshot. Occupancy status decides more here than commission percentage.

Whatever she picks, get the buyer-side number written down before it goes live. Deciding it at offer time means deciding it while somebody is pressuring her, and that's the worst moment to think clearly about $9,600.