What Sellers Need To Know.
Real estate rules have changed late 2024. Selling and Buying Agent fees have been “decoupled”. In theory sellers and buyers each pay their own agents (to ensure they are both fairly represented). National Association of Realtors® (NAR®) and associated MLS members must abide by new rules. There are two main changes to the old real estate business model:
- Buyer Broker Agreements are now required: Realtors® working with a buyer or tenant must have a written brokerage agreement before any property showing (in-person or virtual). All buyers/tenants will have a contractual commitment to make sure the agent they hire will be paid the compensation negotiated on that agreement.
- Compensation for buyer agents cannot be displayed in MLS or 3rd party sites: This prevents buyer agents from prioritizing listings paying bonuses or higher payouts over others offering less.
In a nutshell, there are changes to how we do business, but for sellers the end result is pretty much “business as usual”. Most Buyers will seek to have the sellers pay for their agent fees by financing their broker 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: Buyers are financially obligated via a signed agreement to pay their Brokers. Buyers could pay their brokers directly (out of pocket) but that’s not what is happening. There are two reasons for this: 1) with interest rates high buyers want to put all their money into the down payment and 2) lenders are not willing to finance buyer broker fees outside of closing. So, lenders are telling the buyers to have the sellers pay the buyer broker fees and work it into the price of the property, which is how business was done in the past, but now 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, there is a buyer agent compensation section built into the new real estate sales contract. So, the same end result as before.
Q: How will I know what the buyer wants me to cover?
A: 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 ‘offer’ to pay the Buyer Agent fees?
A: No, you do not. But keep in mind not offering compensation may severely limit your showings. Many Buyers have no way to finance their agent costs other than in a purchase contract. Buyers may choose not to see 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. A buyer could choose to skip your place if other properties are covering their expenses. We believe it is to your advantage to give your agent permission to communicate with a buyer agent that “depending on the offer – you are willing to offset those costs”.
Q: How will offers of compensation be communicated if brokers can’t use MLS?
A: One option is to allow your listing agent to reply: “The seller is aware and will consider the request for buyer agent fees when reviewing the buyer’s offer”. Another option is leaving a coop sheet in the house during showings. We believe it is to your advantage to give your agent permission to communicate with a buyer agent that you are willing to offset those 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 the seller 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