Denver home sellers can save some cash, if they speak up
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Illustration: Natalie Peeples/Axios
When headlines broke about the National Association of Realtors settlement, sellers called their agents wondering: Am I off the hook to pay you?
Why it matters: Sellers never technically had to offer compensation to the buyer's agent — and that number has technically always been negotiable — but it's certainly status quo.
- Reality check: According to a 2023 NAR report, 15% of consumers didn't know they could negotiate the commission. That share is much larger (31%) among younger buyers, ages 24-32.
Catch up quick: The idea behind the settlement is that buyers should be paying their agent, but sellers can still offer some form of compensation.
The big picture: Most agents say that each transaction is going to involve a lot more back and forth with consumers come August. However, many are still urging sellers to offer some form of compensation to buyer's agents.
Zoom in: Denver sellers don't have the upper hand right now, which means their top priority is making the sale, Compass Denver agent David Schlichter tells Axios.
- Most buyer agreements will state that if a seller isn't offering compensation or the offer comes in lower, then the buyer is obligated to pay the difference.
- That buyer, Schlichter explains, is likely to go with the house that doesn't require them digging further into their own pocket.
Between the lines: Agents won't be working for free, and if sellers want to keep more cash in their pockets, they're going to have to push for it.
- Steve Brobeck, a senior fellow at the Consumer Federation of America, recommends sellers offer no more than 2% of the sale price to the buyer in concessions. The buyer can choose to use those funds to compensate their agent, or pay out of their own pocket.
What we're watching: Schlichter predicts these changes will weed out part-time agents. There may be a smaller pool of agents, but better representation and increased transparency is good for consumers, he says.
What's next: By Aug.17, listings on the database brokers use won't include offers of compensation.
- "[Change] will take place slowly, and unevenly, with lots of confusion," Brobeck predicts.