M ED I T ER R A
MID-YEAR REVIEW 2024
Presented by Amy Nease
Understanding Your Options
AS A BUYER, I thought the seller paid the compensation for my agent as part of the transaction. Do I need to sign a Buyer Representation Agreement, including a commission for services?
Historically, most listings a buyer would view for potential purchase offered compensation to the broker when bringing a buyer. With recent industry changes, some sellers are electing to instead shift the cost to the buyer, which is their choice. Accordingly, when working together to identify all the potential homes meeting your search criteria, there will be some for which compensation is offered to the buyer broker and some where it will not. In the latter scenario, the professional services fee would be the responsibility of the buyer.
We believe buyers are best served by having the most capable representative to guide them in what may be their most important asset purchase. The transaction process is extensive and complicated from start to finish, with many potential challenges in the absence of an experienced advocate. This is why we fully explain all aspects of our services, as well as the options for representation and related costs.
For REALTORS®, a review of the Buyer Representation Agreement is required as part of the initial consultation. This
document will include options for the buyer. Premier Sotheby’s International Realty requires buyers to commit to compensation for professional services with the understanding that such costs may be offset through several means, which include:
1.Should compensation be offered by the seller for a buyer broker, that amount will be offset against the amount reflected in the Buyer Representation Agreement.
2. You can make an offer with a special stipulation acknowledging that the offer is inclusive of the required professional services fee to be paid by the seller.
3. You can make an offer of a lower amount based on the projected cost of the professional services fee you will pay at closing.
A successful purchase requires the expertise of a real estate professional who will serve as your guide and advocate. As with specialized services in other industries, an investment is required to receive the best. We believe the most important goal is to ensure a smooth transaction at the right price, with all facets of the process managed with care. This is assured through a Buyer Representation Agreement.
AS A SELLER, do I need to include a commission for the buyer’s brokerage? Should we let the buyer pay their broker’s commission?
There is no requirement to offer a commission to the buyer’s brokerage. However, understand that our fee for professional services includes an offer of compensation to the broker representing the buyer. We do this because the very best way to maximize your financial gain from the sale is to generate awareness and show traffic through an incentive to brokers working with buyers. Creating competition for your home is a primary goal, and without the offer, you may find that brokers working with buyers will not include your home as an option.
From a practical standpoint, most lenders will not allow a buyer to finance brokerage commissions. That means a buyer would need to come up with additional cash on top of their down payment, closing costs, and prepaid expenses to pay their buyer’s broker. As a result, not offering a commission to the buyer’s broker may eliminate buyers who would otherwise qualify to purchase your home or result in them making lower offers to compensate for the expense.
Beyond the limitations above, note that any buyer expected to pay for his or her own representation may easily include: 1.A contingency in any offer requiring you to cover the cost of those services as a condition of sale. That will prove the
most common way for buyers to recoup the expense, and it would ultimately end with a similar financial outcome — with the potential of missing opportunities since buyer agent compensation was not promoted from the beginning.
2.Without a stated offer of compensation, buyer brokers are free to demand whatever level of compensation they wish to bring a buyer. This could prove a percentage amount well above what you could have paid, thereby making the transaction excessively uncertain and expensive.
A successful sale requires the cooperation and expertise of the real estate professionals representing both parties to the transaction. We submit, as a seller, that the last thing you want to deal with is a buyer not represented by a professional as it could result in extensive issues with negotiations and the transaction process, leading to a compromised outcome. We believe the most important goal is to ensure a smooth transaction with the maximum net proceeds from closing. This is possible only by having all within the brokerage community working on your behalf to bring every qualified buyer in the market to your door, resulting in the highest possible sales price. Offering buyer broker compensation is the very best way to ensure this desired outcome.
MEDITERRA
This statistical analysis represents Mid-Year 2024 market trends in Mediterra. For an in-depth analysis of your home’s value, call me today at 239.910.7267 for a complimentary evaluation.
FAMILY & VILLAS
COACH HOMES
2023: 96.4% ( +0.1% IN 2024 )
$995 96.5% 17 79 84 $605 92.1%
2023: 17 ( 0.0% IN 2024 )
AVERAGE SOLD / LIST PRICE RATIO AVERAGE DAYS ON MARKET
COACH HOMES
93.9% (
FAMILY & VILLAS
COACH HOMES
9 AVERAGE PRICE / SQ. FT.
COACH HOMES
SINGLE FAMILY & VILLAS
2023: $955 ( +4.2% IN 2024 )
COACH HOMES
(
2023: 6 ( +50.0% IN 2024 )
2023: 38 ( +107.9% IN 2024 )
2023: 84 ( 0.0% IN 2024 )
$3,698,120 $1,775,000 2023: $3,850,000 (-3.9% IN 2024 )
)
