What’s up with the Buyers Agreement?
Prior to mid 2023, buyer commissions for the past several decades were exclusively paid out of the seller’s proceeds. If you bought a house in that time, you may recall hearing “I’m paid by the seller” from your buyer’s agent.
In mid-late 2023, some smart people realized that was an issue because what the buyer’s agent was getting paid (buyer agent commission) was not readily transparent – and who does the buyer’s agent work for, anyway?
Fast forward to the start of 2024 and the NWMLS – along with many/all MLS across the country – have adopted some new rules with regard to buyer agency agreements and their function in today’s real estate industry.
To make a longer story short, buyer’s agency agreements are required between all agents and buyers for the agent to perform real estate services on the buyers’ behalf. The new agreement/form, to be signed by agent and buyer alike, details the commission the buyer shall pay the broker – and whether it can be covered by a seller (still a good idea, in my opinion). What happens to the difference (if the buyer says they’ll pay the agent 2.5%, but the seller offers 3% – who gets the extra .5%)? Any several other questions like that.
Like seller’s “sign up with” an agent to list a house, so too will buyers “sign up with” an agent to help them buy. This creates a moment for conversation about commissions, duties, commitment by both parties to each other and more. It is a big shift in the way real estate has been done for the past many years, but it is a shift in the right direction of transparency/communication between buyers and agents.
For agents, the requirement will alleviate concerns about buyers “using them” for a showing, and then writing up an offer with another agent. Or the concern whereby you’re working with a buyer for months and they happen to stumble upon or reach out via an online portal to a house of interest and a different agent answers that call, the buyer loves the home and they buy it. In the past, your hard work for months would go unpaid and unrecognized. Now, the new agent would want to ask and be sure the buyer doesn’t have an existing buyer agency agreement with another agent – you – and that protects your time and energy!
For buyers, you’ll get increased transparency, the ability to “sign up” with a buyer agent and feel the commitment from them, contractually. You’ll also have a clearer path to “firing” your agent – or asking to end the relationship – in a more straightforward manner.