If VLS does not reduce their commission to 3% on pre owned homes, their listings will plummet. If the average pre owned home sells for $400,000 and VLS sells 3500 pre owned homes annually, this adds up to $84,000,000 in commissions at 6%. This law is long overdue and prevents double-dipping where the selling brokerage keeps the entire 6%, if they represent both sides of the transaction.
Consider the savings: A $400,000 home generates a $24,000 commission at 6%. I have never had a problem negotiating a 5% commission and this law will now allow me to pay only 2 1/2% to the listing agent. This would reduce the selling agent commission on a $400,000 home to $10,000 allowing the seller to pocket an extra $15,000.
I agree with the post that the seller may be asked to provide cash back to the buyer to compensate their agent but the seller has the option to agree, refuse or raise the price of the home by the cash-back amount.
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