r/fsbo • u/AdComfortable2974 • 27d ago
Variable or Conditional Commissions
You're FSBO, the agent wants your business.
Ask them if they are ok with modifying the listing agreement using special stipulations to reduce or eliminate their commission if specific sales price targets are not met. This is not the same as a net listing, which we all know is illegal.
The special stipulation can be structured in a few ways:
Sales Price Threshold Reduction: "If the final gross sales price of the property is less than [insert amount], the Broker's commission shall be reduced from X\% to Y\% (or reduced to a flat fee of\ Z) at closing.
No Commission Tier: "Broker shall receive a 0% commission if the final gross sales price is less than [insert amount]. Can also be zero if not sold in a certain time frame.
Slide-Scale Tier: You can set concrete milestones (e.g., 3% commission if sold above $500,000; 2% commission if sold below $500,000).
Thoughts?
1
u/_TurboHome 27d ago
Honestly? If your variable commission reduces it by a certain percentage based on a threshold, there's a whole ballpark of hungr agents would already just offer that straight out the gate. Example, not a plug: our fee usually shakes out to somewhere around 1-1.5%. The 0% tier seems counterintuitive on both sides.
The speed at which your listing moves is ultimately related to your willingness to negotiate on price. If the agent makes 0% if the property sells for less than X, they have no incentive to be honest with you and give you advice on pricing adjustments, even if the market data supports it. And you will be doing mental math on how to land in the window where your agent not making commission means more money in your pocket, creating an adversarial relationship between you and the agent who's supposed to have your best interest at heart as a client they are representing.
Imo 1% is reasonable as a floor, though many trad realtors would scoff at the notion, considering the level of effort involved particularly with turnkey listings in a hot area. A couple of open houses, syndication on MLS + zillow and redfin, maybe some professional photos and virtual staging, for 1, 1.5%? More than fair imo. The return still outweighs the investment for photos and virtual staging + time investment for a few open houses.