What Arizona Home Sellers Need to Know about Buyer Agent Commissions

Navigating the New Real Estate Landscape: What Arizona Sellers Need to Know About Buyer Agent Commissions By DeDe Forwood, REALTOR® with HomeSmart If you’re planning to sell your house in Arizona or are currently in the process, you’ve likely heard about upcoming changes affecting how homes can be listed and marketed, specifically regarding commissions offered to buyer agents. Key Changes Starting August 17, 2024 As of August 17, 2024, your listing agent can no longer include an offer to compensate buyer agents on the Arizona Regional Multiple Listing Service (ARMLS), a local marketplace where brokers share information about properties for sale. This change has led to some confusion among sellers. Clarification: Sellers can still offer compensation to buyer agents to make their listings more attractive. According to the National Association of REALTORS® (NAR), the process involves the following steps: Disclosure: Your agent must clearly disclose any offer of compensation to buyer agents and obtain your approval. Specificity: The disclosure must specify the amount or rate of compensation being offered before it is actually offered. Alternative Advertising: While the compensation offer cannot be included in your MLS listing, it can be advertised on social media, flyers, and websites. To Offer or Not to Offer Buyer Agent Commission You are not required to offer compensation to buyer agents. However, here are two important reasons why doing so might be beneficial: 1. Maximizing Buyer Interest One of the best ways to get the highest price for your house and sell it quickly is to attract as many potential buyers as possible. If you choose not to offer a commission to buyer agents, you may reduce the pool of interested buyers. Buyers might prefer listings that include commission payments for their agents, making those homes more appealing. 2. Competitive Edge If other homes in your area offer commissions to buyer agents and you do not, buyers might opt for those homes instead. This could result in your home spending more time on the market. The longer a house sits unsold, the more likely buyers are to question its value, potentially leading to lower offers. The Case for Not Offering Compensation Not offering compensation also presents a strategic opportunity. By not including a buyer agent commission upfront, you allow your listing agent to negotiate and require the buyer’s agent to include their compensation request as part of the offer. This can lead to more transparent negotiations and potentially better terms for you as the seller. Potential Downsides of Not Offering Buyer Agent Commission While it might seem like you could save money by not offering a commission to buyer agents, consider these potential drawbacks: Reduced Buyer Pool: Not offering a commission may lead to fewer interested buyers, which can result in fewer offers and less competitive bidding. Longer Time on Market: Homes that sit on the market for extended periods can be perceived as less valuable, ultimately affecting your final sale price. The Takeaway Starting August 17, 2024, your listing agent cannot include an offer to compensate buyer agents on the MLS. However, you can still offer compensation through other advertising means with proper disclosure and approval. While not offering to pay buyer agents might seem like a cost-saving measure, it could reduce the number of offers and potentially lower your final sales price. Offering compensation can make your listing more attractive, help sell your house faster, and secure the highest price possible. Navigating these changes in Arizona real estate requires careful consideration and strategy. If you have any questions or need assistance, feel free to contact me, DeDe Forwood, REALTOR® with HomeSmart. Together, we can ensure a smooth and profitable home-selling experience.

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