Do California sellers have to pay the buyer's agent?

Understand the entire offer before deciding what works for you.

The buyer can ask. The seller can negotiate.

A buyer may submit an offer requesting that the seller pay some or all of the compensation the buyer has agreed to with the buyer's broker. The seller can:

• Accept the request
• Reject the request
• Negotiate the amount
• Counter other terms of the offer

The important point is that buyer-broker compensation is not automatically built into Phil's flat listing fee. It is a separate transaction term.

Buyer-broker compensation is handled differently than it once was.

Under current MLS rules, offers of buyer-broker compensation are not displayed in CRMLS. Instead, buyer representation and compensation are generally established between the buyer and the buyer's broker through a written agreement.

If the buyer wants the seller to contribute toward that compensation, the request can be made as part of the purchase offer.

Look at the request as part of the whole deal.

Suppose a buyer submits an offer that includes:

The seller should not evaluate the 2% request in isolation. Phil helps the seller evaluate the entire offer:

• Purchase price
• Financing
• Buyer's down payment
• Deposit
• Appraisal terms
• Contingencies
• Requested credits
• Buyer-broker compensation
• Closing timeline
• Other contract terms

The real question is: What does the complete offer mean for the seller's risk and net proceeds?

Compare offers by net result, not one line item.

The higher purchase price does not automatically mean the seller nets more. The seller should compare all material terms and estimated proceeds.

Phil's flat fee covers your listing representation.

Phil's flat listing fee covers the seller's listing-side representation, including the core services described in the selected package. That includes full-service representation involving:

• Pricing strategy
• Property preparation guidance
• Professional marketing
• MLS exposure
• Showing coordination
• Offer evaluation
• Negotiations
• Contracts and disclosures
• Inspection and appraisal issues
• Escrow coordination
• Guidance through closing

A buyer-broker compensation request is separate from that listing-side fee.

Seller concessions are still part of the negotiation.

A seller may be willing to consider concessions requested by a buyer. Depending on the transaction, concessions may relate to items such as:

• Buyer closing costs
• Financing expenses
• Repairs
• Other buyer transaction expenses

CRMLS allows listing information indicating that a seller may consider concessions. However, a concession advertised in the MLS cannot be conditioned on being used to compensate the buyer's broker. Buyer-broker compensation itself is not offered through CRMLS.

Sometimes the request is about cash needed to close.

A buyer may have enough income and financing ability to purchase the property but still be managing significant upfront transaction costs. Depending on the buyer's written agreement with their broker and the financing structure, the buyer may request seller participation toward buyer-broker compensation.

From the seller's perspective, that request should be evaluated economically. A seller may decide that an offer containing such a request still produces an acceptable price and net result. Or the seller may negotiate differently.

Yes. It is part of the negotiation.

A seller is not required by Phil's listing agreement simply to accept whatever buyer-broker compensation request appears in an offer. The seller can evaluate the request and decide how to respond. That may include:

• Accepting
• Rejecting
• Reducing the requested amount
• Changing the purchase price
• Changing seller credits
• Countering other offer terms

Phil's role is to help the seller understand the economics and negotiate the transaction.

The buyer and buyer's broker establish their compensation agreement.

Under current MLS policy, MLS participants working with buyers generally must enter into a written buyer agreement before touring a home. That agreement must address the buyer broker's compensation in an objectively ascertainable way and state that broker fees and commissions are negotiable.

The buyer broker generally cannot receive more compensation from all sources than the amount or rate agreed to with the buyer. If seller participation is requested, it can help satisfy the buyer's agreed compensation obligation, subject to the transaction terms.

Buyer-broker compensation is not advertised through the MLS.

CRMLS prohibits listing brokers from using MLS fields, remarks, media or uploaded documents to offer or communicate a willingness to offer buyer-broker compensation. Seller concessions are treated differently.

A listing may indicate that the seller is willing to consider concessions, provided the concession is not conditioned on being used to compensate a buyer representative.

Price matters. Net proceeds and risk matter too.

Phil encourages sellers to evaluate offers based on the complete transaction rather than reacting to one individual term. That includes:

• Purchase price
• Estimated seller proceeds
• Financing strength
• Appraisal risk
• Contingencies
• Requested credits
• Buyer-broker compensation
• Repair exposure
• Timing
• Probability of closing

The strongest offer is the one that best fits the seller's priorities when all meaningful terms are considered.

A flat listing fee gives the seller clarity on one side of the transaction.

Phil's flat-fee model gives the seller a defined listing-side cost based on the selected package. That makes it easier to evaluate other negotiated expenses separately, including buyer-broker compensation requests.

The goal is not to pretend buyer-side costs do not exist. It is to separate the seller's listing representation cost from the value of the property and then evaluate each offer on its actual terms.

Buyer-agent compensation questions for California sellers.