Use the New MLS Rules to Increase Your After-Sale Profit
Nothing eats more of our home equity than real estate commissions when we sell our homes. For 100 years, the National Association of Realtors (NAR) has effectively insulated the real estate commission from economic pressures and negotiations. But that’s about to change thanks to new rules the NAR agreed to as part of a class action lawsuit settlement. If you know how to make the rules work for you, you can save about 33% off of the typical six percent selling commission. Now that you’ve done the math in your head, what would you do with the thousands of home equity dollars you could save?
Here’s a key fact you need to know: The most commonly quoted commission rate has been six percent of the sales price, with 50% being a non-negotiable published compensation offered to buyer brokers. This was the norm, but not anymore.
Here’s a strategy to increase your profit and decrease your broker fees. Did you know that the six percent commission was actually two 3% commissions? By understanding this, you can negotiate both and potentially save a significant amount. (At Essential Real Estate, we’ve already done the negotiation for you. Our fee is four percent, not six, not five.)
The most important outcome of the settlement is the elimination of the rule that required MLS publication of seller paid compensation. Promising to pay a top-of-the-market-rate commission before seeing any offers is crazy in a hot seller’s market. You may now withhold your commitment to pay a buyer agent commission until AFTER seeing the offer(s). By exercising your right to negotiate buyer agent commission as part of the offer, you will be negotiating when you have the most leverage and the buyer agent has the least. However, if you promise to pay a set amount before seeing the offer(s), you lose your leverage.
The new rules are not complex, but they are misunderstood and misrepresented. At Essential Real Estate, this model has been our model since 2019. Talk to us to learn exactly how to keep more of your home equity and lower the costs to sell your home.