Biggest mistake in negotiating a listing agreement

[James McGovern]

Some listing agents negotiate a total amount for both them and the buyer's agent. The problem with this is if a buyer comes along who has negotiated, say, 1.5% with their agent, you need to make sure that your Realtor isn't the one who pockets the difference. It shorts you, and it creates improper incentives for you agent.

A smarter thing would be to negotiate what you pay your agent, and be open to considering offers based on the net. That way if a buyer comes along and places an offer with a lower than average fee, those savings sweeten the deal for y'all, not for your agent. And of course, if a buyer comes along who needs to pay their agent more, that's fine as long as their offer is good enough to make up for it.

[James McGovern]

Have one agreement - max 3% - for the listing agent commission. Have a separate agreement that says you, as the seller, are open to giving a concession to compensate a buyer’s agent, but the amount will be determined upon review of the offer.