Have you been reading the headlines saying that “big changes” are coming to the way that agents get paid? Here’s the scoop: under the “old way” of buyer broker compensation, sellers would offer agents who brought a buyer through their home a certain amount of compensation. The Department of Justice was concerned that this would incentivize agents to steer their buyers to sellers who were offering higher payouts.
Let’s say, for example, that two houses were selling in the same neighborhood: 123 Oak St and 123 Maple Ave. And let’s further say that 123 Maple Ave’s owners were offering $4,000 more than 123 Oak St. All else being equal, your buyer’s agent would benefit from you choosing to purchase the Maple Ave home, and would be incentivized to steer you towards that property.
The “new way” will be for you (as a buyer) and your agent to discuss the buyer’s agent fee up front, and sign an agreement stipulating the cost of your buyer agent’s fee. If a seller is offering more than that amount, your agent cannot accept it; if a seller is offering less than that amount, you will be responsible for paying the shortfall. In fact, it’s always been the case that the buyer is responsible for any shortfall on the buyer’s agent commission, so the biggest change is that the buyer's agent can no longer accept any “bonus” or extra commission offered by the seller.
Practically speaking, what does this mean for you? You will need to sign a buyer agency agreement before an agent shows you any properties, and you’ll establish your agent’s fee—and you should feel like the fee your agent is charging is a good value for the services your agent is providing!
Want to know more? I’d love to talk with you more and answer any questions you may have!
