Important Changes in Buyer Broker Agreements: What Buyers and Sellers Need to Know

If you’ve been following real estate news, you know that as of August 17, 2024, the way buyers, sellers, and agents handle commissions and agreements has changed dramatically. These new rules, resulting from a landmark National Association of Realtors (NAR) settlement, have reshaped industry practices that stood for nearly a century.

What’s Changed?

·       MLS No Longer Shows Buyer Agent Compensation:
Traditionally, the seller’s offer to pay the buyer’s agent commission was visible in the Multiple Listing Service (MLS). Now, compensation details are private and must be shared individually by listing agents, outside the MLS.

·       Mandatory Buyer-Broker Agreements:
Before viewing any property—virtually or in person—buyers must sign a written agreement with their agent. This contract outlines the agent’s compensation and specifies who will pay it.

Buyer Broker Agreements: Your Four Options

Buyers now have more flexibility—but also more responsibility—in deciding how their agent is compensated. Here are the main options:

1.      Limit Property Showings:
Buyers can instruct their broker not to show properties where the seller isn’t offering compensation. This may reduce the number of homes seen, as some sellers may not offer a buyer broker commission.

2.     Pay the Broker Directly:
Buyers may choose to pay their agent directly, regardless of seller participation. This reduces seller closing costs but is less common, as buyers are not used to paying agent fees out of pocket.

3.     Include Compensation in the Contract:
Buyers can ask their agent to include a clause in the purchase contract requiring the seller to pay the buyer's broker’s fee if not already offered. This keeps the traditional model alive, where the seller covers the buyer agent’s commission.

4.     Split the Compensation:
Buyers and sellers can agree to share the buyer broker’s fee, with buyers paying the difference between the agreed maximum and what the seller offers.

Why These Changes Matter

·       For Buyers:
You now have to decide—upfront—how your agent is paid. This could mean negotiating for seller concessions or budgeting for your agent’s fee as part of your purchase.

·       For Sellers:
While you’re no longer required to offer buyer broker compensation, doing so can increase your home’s exposure and attract more offers, potentially leading to a higher sale price.

Our Approach in the Florida Keys

At Key Colony Point, we’ve updated our buyer broker agreement forms to reflect these new rules. Most sellers are still offering buyer broker compensation—about 99% continue this practice—but we’re prepared to help you navigate situations where that’s not the case. Our experience shows that offering compensation remains a smart strategy for sellers, maximizing exposure and net proceeds.

What Should You Do Next?

·       Buyers:
Discuss your options with your agent before you start touring homes. Understand the compensation agreement you’re signing and how it could affect your home search and negotiations.

·       Sellers:
Talk to your listing agent about the benefits of offering buyer broker compensation, even though it’s no longer mandatory.

Contact Me

Have questions about the new buyer broker agreement rules, or need guidance on your next real estate move in the Florida Keys? I’m here to help you navigate these changes and achieve the best possible outcome.

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