What Sellers Need To Know.
Real estate rules changed late 2024. Selling and Buying Agent fees were “decoupled”. To ensure they are both fairly represented sellers and buyers each pay their own agents -in theory (see below). National Association of Realtors® (NAR®) and associated MLS members must abide by two main changes to the old real estate business model:
- Buyer Broker Agreements are required: Buyers or Tenants working with a Realtors® must have a written brokerage agreement before any showing occurs (in-person or virtual). The agent they hire will be paid the compensation negotiated on that agreement.
- No compensation can be offered in MLS or 3rd party sites: As a result, the contracts REALTORS identifies what commission the seller may be paying the buyer agent.
In a nutshell, there are changes to how we do business, but for sellers the end result is pretty much “business as usual”. With few exceptions buyers have been asking sellers to pay for their agent fees by financing their agent commissions in the purchase price, just as they have done in the past.
Frequently Asked Questions:
Q: Don’t Buyers pay their own agents now?
A: Kind of. Buyers could pay their brokers directly (out of pocket) but that’s not what is happening. With high interest buyers want to put all their money into their down payment – to keep monthly costs lower. So, buyers are paying their agents via the sellers by way of the purchase price. This is how business has been done in the past. Now you will see both agent commissions on the closing documents so it’s more transparent.
Q: What are the Buyers doing differently?
A: The short answer is – not much. Most Buyers have been asking the Seller to pay their entire buyer broker commission during the offer/negotiation process. In fact, a buyer agent compensation section is built into the new real estate sales contract. This is happening across the market, in every area, and every price range.
Q: How will I know what the buyer wants me to cover?
A: You will see it in an offer. Section 4 of the contract Seller Contribution To Buyer Broker Compensation clearly identifies your obligation. But don’t focus on the compensation. Focus on your bottom line.
Q: Do I have to pay the Buyer Agent fees?
A: No, you do not, but it may severely limit your showings. Many buyers have no way to finance their agent costs other than in a purchase price. Buyers may choose to skip a home where the seller is not going to cover those costs. As more homes come available and we change from a seller’s market to a buyer’s market sellers will be competing for buyer’s attention. We suggest you give your agent permission to communicate with a buyer agent that “The seller is willing to help with buyer commissions, but it depends on your offer”.
Q: How will offers of compensation be communicated if brokers can’t use MLS?
A: One option is leaving a sheet in the house during showings indicating your willingness to cooperate. We also believe it is to your advantage to give your agent permission to communicate with a buyer agent that you are willing to offset buyer broker costs. You should only care about the bottom line. If one buyer asks for more assistance but has a better net offer – you win!
As a seller, you should understand that it is very likely that the buyer is going to ask you to help the buyer get their fees and other closing costs financed within the transaction. It is important to have an experienced agent that knows how to work within the new rule changes. Realstar is committed to providing you the best service possible.
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All Realtors® remain committed to being the trusted advisor and provide their expertise to guide clients in navigating the complex path to what is for many the largest and most significant financial transaction in their lives. More information can be found at facts.realtor