My Take on Real Estate Commissions

Buyer’s agents are now motivated to get their clients more aggressive real estate discounts when their compensation is reflected in their ability to get the best deal.

Traditionally, both buyer and seller agents earned a percentage of the sale price, leading to higher sale prices and commissions. However, this was of no benefit to the buyer. This commission structure does not motivate the buyer’s agent to get their clients a discount on their new home, which is one of the main responsibilities of a buyer’s agent.

Moving forward, I'm introducing a new approach: The Structured Fee. The structured fee is defined by the presence of a flat fee AND a supplemental fee. The flat fee can be decided upon by the buyer’s agent. The supplemental fee is simply the fee associated with the discount secured for the buyers on their new home. Example: A 10% supplemental fee of a $100,000 discount on a $1,000,000 home is $10,000. This 10% of the buyer’s savings is paid to the buyers agent as compensation for their efforts in securing the discount. This is on top of the flat fee.

This ensures the buyer’s agent is fully aligned with their client’s interests. Because when buyers save, agents earn. When buyers win, so do their agents.

Sellers on the other hand, will still pay commissions to their listing agents. This ensures they get the best sale price, since a traditional commission has a direct relationship to the sale price, which makes sense when an agent is representing a seller.

Are you a buyer and want to ditch the old, crumbling commission structure for a more future-forward approach? Contact Sara today.