I want to list my home for 2.5 million with a flat fee broker. Do I still have to pay buyers agent 3% commission?

Question

I am located on Seattle's East Side where the real estate market is hot and inventory low, so I doubt I'm going to have a difficult time selling my home. 99% of buyers first search online to find the homes they're interested in rather than having agents show them the homes sight unseen like in decades past. It's really online MLS listings that sell homes in 2017, not agents so I have decided to use a flat fee broker which will put me on the MLS and all of the major real estate sites and save me the 3% listing agents commission ($75000).

I realize that I need to offer the buyers agent a commission (or there will be no incentive to show the home), however 3% or $75,000 for 20/30 hours of work seems extreme. It's just as easy to sell a lower priced home than it is a higher priced one and I'm sorry but opening a few lockboxes, driving clients around and completing paperwork isn't worth $2500 an hour in any universe no matter how good the agent is. 2% commission is still $50,000 (which in my mind is still ridiculous compensation for the value that agents add, but still saves me $25,000. My worry is that buyers agents will bad mouth my house or be reluctant to show it if the commission is less than the full 3% even on a 2.5 million home. In the higher end real estate market how common is it for people to offer buyers agents a lower percentage of the sale price; what is the acceptable range? Any advice greatly appreciated!

Answer 1

(Disclosure - I have a Realtor license) You are free to negotiate any deal you wish. There are brokers who may be willing to list your home for a $1000 flat fee and 2% to the buyer broker.

Another might be willing to put it up on MLS for you for a small fee, and not provide any other service.

You sound like a candidate for FSBO, for sale by owner. You can try that, and if you get no bites, work with an agent.

If I had a buyer at the ready, I'd be happy to sell them a $2.5M house for the 2% between my broker and me. Other agents might not react that way.

As far as the buyer/broker goes - of course they can steer buyers away. But doing so would be illegal. If a potential client asks about the house, they really do have an obligation to show it, if they refuse, the buyer is likely to just show up and try to see it.