Given the current buyer's market, it seems to me that buyers should be able to negotiate more creative buyer's agent commission structures than merely 1/2 of the total sales commission (historically 1/2 of 6%, down to 1/2 of 3% in recent years). The typical structure doesn't incentivize the buyer's agent to negotiate the purchase price down; rather it incentivizes the buyer's agent to convince the buyer to pay *more* than what they expected (i.e. close the sale, get more $). Maybe something like this could be more of a market commission structure for buyer's agents (using fake numbers):
Assume the commission structure is 3% total, with 1/2 going to buyer's agent. List price is $500,000. So, under the typical structure, if sale is at list, then buyer's agent would get $7,500. But we could structure the compensation differently:
If the sales price equals or exceeds $490,000, then Buyer splits 1/2 of Buyer's agent's commission (so if the sale is at list, then buyer's agent would keep $3,750 and give the other $3,750 back to the Buyer).
For every $1,000 that the sales price is below $490,000, then Buyer's refund is 1/2 of the Buyer's agent's commission, less $75. So if the sale is at $475,000, then Buyer's refund is (half of $7,125) - $1,125 = $2,437.50. Agent keeps $4,687.50. If the refund becomes a negative number, then Buyer
pays that amount as a bonus. So if the sale is at $425,000, then Buyer's refund is (half of $6,375) - $4,875 = -$1,687.50. So Buyer would pay the agent an additional $1,687.50.
Seems like this would make the buyer's agent's interests align with the buyer.
