Thank you for using Just Answer. I am an attorney with 30 years of experience including real estate and real estate investing experience.
Your Agent isn't saying that buyers would not be interested. He is saying that the real estate agents who work with buyers will not show your house. This is why:
The way Real Estate agents get paid is that they split their commissions betwen 4 persons: Listing Broker, Listing Agent, Selling Broker and Selling Agent.
The Listing Agent works for a Listing Broker. He does not work for himself, he is required by law to work for a Broker.
The same is true for the selling agent. He works for a Broker too.
When you enter into a listing agreement the porperty is listed on the "multilist" by the listing Broker agent. Selling Agents (usually working with buyers) see the property and how much the commission is. It is the selling agents that bring buyers to the property.
When the property is sold the Commission is split 4 ways. 1/4 to the Listing Broker 1/4 to the Listing Agent 1/4 to the Selling Broker and 1/4 to the Selling Agent. So the reality is that the agents that are bringing buyers to properties are looking for the best pay day for themselves. They are less inclined to bring buyers to see properties where the Commissions are reduced.
This does not mean that your property will not sell, it just means that the Agents showing the property have a reduced incentive to show your property over another property.
You can alter the equation by offering a Selling Agent Bonus. This is money that will go directly to the selling agent and Not split. Listing agents of course are not fans of such arrangements (they feel shorted).
So legally, you can negotiate the Commission that you want to pay. The Broker and Agnet have the right to refuse to take that listing. And if they do list it Selling Brokers (those working with the buyers) are free not to show your property.
I hope this information helps you.