News > Changes Coming With Buyer Agent Commissions

2024-06-08

On March 15, 2024, the National Association of Realtors (NAR), under fire from some lawsuits, agreed to end the ability for listing agents to advertise or offer buyer agent commissions in the MLS. Though the seller was never required to pay buyer agent commissions, opponents saw this standard as pressuring sellers to offer buyer agent commissions so that their property would be shown by agents representing buyers.

How Will This Affect Buyers?

In August, buyers will probably see 2 immediate changes:

Buyers will have to sign a representation agreement BEFORE they are shown any homes by a buyer's agent.

All Realtors in Arizona will have to follow this rule. This basically means that before you get started looking for a home, you choose who will represent you and how they will represent you. The agreement you sign with your agent also include your agent's compensation for providing these essential buyer services.

No offer of compensation to buyer agents from sellers can be published on the MLS.

In the past, the commission offered to the buyer's agent from the seller was listed in the MLS. After mid-August of 2024, the seller can still pay the buyer agent commission but there is no central repository to see whether and how much the seller will pay.

How Will My Buyer's Agent Get Paid?

Your agent can get paid in one of three ways:

• The seller pays your agent's commission. If you've bought and sold property in most states before, this is the traditional way your agent gets paid. The seller pays the commission directly out of their proceeds.
• The seller offers a closing cost concession, and some or all of that amount can be used by you to pay your buyer's agent. This option will need to be negotiated in conjunction with what your lender allows.
• The seller does not contribute towards your agent's commission at all and you are responsible to pay your buyer's agent commission at closing time.

The logical question buyers should have now is, how do I know exactly how my agent will get paid when my agent helps me buy a property? Since sellers can no longer specify in the MLS the amount they will offer to a buyer's agent, this can be negotiated in the purchase agreement. That's where your buyer's agent comes in. Your buyer's agent will negotiate one of the three options above depending upon your wishes, and if the seller does not want to pay your agent's commission, then your agent can negotiate the price of the property down to cover that commission, or you can choose to move on to another property where you can get a better deal.

The value of having a buyer's agent has been shown time after time with our buyer clients. Besides having access to a knowledgeable real estate professional to guide you in finding the best condo, townhome or single family residence, negotiating the best price and making the escrow process as smooth and convenient as possible, you can also feel comfortable in knowing you have someone looking out for your best interests, rather than being subjected to the competing interests of the seller and the seller's agent.

We'd be happy to answer have any questions about this process. Just Contact us and we'll arrange a time for a phone call or meeting to discuss our value as buyer's agent and how best to navigate this change.

 

Though not guaranteed, information and statistics in this article have been acquired from sources believed to be reliable.