Can A Seller Refuse to Pay a Buyers Agent

Can A Seller Refuse to Pay a Buyers Agent

We unveil the hidden truth into when a seller can refuse to pay a buyer’s agent, and when they must offer compensation.

Yes, a seller can refuse to pay a buyers agent, but not always.

The National Association of Realtors(NAR) prohibits listings to be placed on local realtor Multiple Listing Service(MLS) platforms without offers to compensate buyer’s agents.

This article will explain when a seller can refuse to pay a buyer’s agent, and when they cannot.   The question is not a simple yes or no.

When A Seller Can Refuse to Pay a Buyers Agent

Before Signing a Listing Agreement With a Brokerage

Before signing a listing agreement with a broker, a seller can refuse to pay a buyer’s agent.

In Florida, the Exclusive Brokerage Listing Agreement has section 9 “Cooperation with and Compensation to Other Brokers”.  In this section, you can limit how much you are willing to compensate a buyer’s agent, or you can completely refuse to pay any fee to a Buyer’s agent.

Where a problem occurs (which is being changed in the summer of 2024) is that if you refuse to pay a Buyer’s agent, you cannot list on your local Multiple Listing Service (MLS).

This significantly reduces your agents ability to market the home properly.  Fewer people will be seeing your home for sale which will lead to a reduction in demand for your home, and can likely lead to a lower sales price.

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When You Sell Your Home Without an Agent (FSBO)

If you are selling your home without a real estate agent, you are not obligated to pay a selling agent or a buyer’s agent.  You can list on any online home search website and indicate you are not willing to pay a buyer’s agent.

Because 89% of home buyers used an agent in 2023, any offers you receive may still be through a real estate agent.

If your buyer has an agent working for them, you may still end up paying for the buyer’s agent, although you are under no obligation to.  The buyer’s may:

  • Request you compensate their agent
  • Reduce their offer by 2-3% so that they can pay their agent
  • Refuse to make any offer on the home since not compensating buyer’s agent isn’t the current norm

If you can find an unrepresented buyer (11% didn’t use an agent in 2023), then you will likely be able to avoid realtor fees.

When A Seller Cannot Refuse to Pay a Buyers Agent

Listing on the MLS

NAR mandates that any home to be listed on the (MLS) must include an offer to compensate buyer’s agents.

Currently, you cannot refuse to compensate a buyer’s agent if you want to list on the MLS and get the most exposure on your home.

Changes to Real Estate Commissions May Be Coming

The National Association of Realtors(NAR) recently settled a lawsuit that will change real estate commissions.

💰One of the biggest changes coming is that offers of compensation to cooperating brokers is no longer a requirement to list a home for sale on the MLS.

📃Buyer’s will be required to sign agency agreements before visiting any homes which outline their compensation.

🕑It will take some time for the market to work out the full effects of the settlement, but people believe that it will lead to more open and transparent buyer-agent commissions.

🗣️The settlement is still be negotiated at the time of this writing.  They settlement is scheduled to take effect in July of 2024, subject to change.

 NAR Reaches Agreement to Resolve Nationwide Claims Brought by Home Sellers 

When You Have Already Signed a Listing Agreement

Once you have signed a listing agreement with your brokerage, you cannot unilaterally change that agreement.  You’ve agreed to pay your broker some amount of compensation (usually 5-6%), and your broker has agreed to split that commission with a buyer’s agent.

If you want to change that, you can call your agent and see if they would be willing to remove the offer to compensate another agent.  Agents will likely not want to do this because it will make the home harder to sell, and the home will need to be delisted from the MLS.

Not Paying a Buyers Agent May Reduce Your Overall Sales Price

Being a seller and paying for the buyer’s agent can be very frustrating.  Why should you, the seller, compensate the agent representing the other side of the transaction?

The problem is when you do not offer compensation to the buyer’s agent, you will most likely be reducing your home’s sales price.  Think of it this way:

  • If you do not want to pay the buyer’s agent, then the buyer must, and it will influence how much they offer on the home since they know they need another 2-3% to close.
    • Commissions cannot be rolled into the mortgage so their out-of-pocket expense to buy the home just went up by 2-3%.
    • Buyers often look at homes right at their max budget, which means this increase may not even be possible on their end.
  • Real estate agents represent 89% of all buyers and may filter out your home and not even show it to their buyers
    • This will reduce the visibility of your home and eliminate many potential buyers

So, Can A Seller Refuse to Pay a Buyers Agent?

Sellers can refuse to pay a buyer’s agent, but not without consequences.  The most likely scenario is that you save 2-3%, but reduce the overall demand for your home by eliminating some buyers who have representation, and reducing the visibility of your home by not being on the MLS.


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