On August 17, 2024, some industry-wide changes will take effect that impact the way people work with real estate agents and buy and sell homes. This includes the requirement of Buyer Broker Agreements and the removal of buyer-broker compensation offers in the MLS (more on that below). As a company that has always embraced change, Monarque Group with @properties Christie's International Real Estate is ready to help our clients navigate this new environment with confidence and ease. Here’s a quick rundown of what to expect:
BUYER BROKERAGE AGREEMENTS ARE REQUIRED
Similar to how home sellers enter into a listing agreement that spells out their broker’s services and compensation, homebuyers will now enter into a buyer-broker agreement that will do the same. This agreement must be in place before a broker can show properties (even just one).
While this might seem like a big shift, the reality is that buyer-broker agreements have been in use for years in our industry. This change simply makes them universal, which is a good thing because the agreement protects the buyer by outlining their broker’s services and fee.
BUYER-BROKER COMPENSATION CAN BE FUNDED IN DIFFERENT WAYS
Since homebuyers and sellers will independently determine the amount they pay their respective brokers, buyer-broker compensation will no longer be displayed in the MLS.
For buyers, this means they may not know if some or all of their agent’s compensation will be covered by the seller. If the buyer makes an offer on a property, they can still ask a seller to fund the compensation through the proceeds of the sale, or they can pay their broker directly (or do some combination of the two).
For some buyers, it may not be practical to pay a broker’s fee with cash on hand. In this situation, a buyer might choose to adjust their down payment. Credits or grants may also be available through certain lending programs. @properties Christie’s International Real Estate’s in-house mortgage lender, Proper Rate, can help you plan for different scenarios. Ask your agent to connect you with a Proper Rate loan officer.
SELLERS CAN STILL PAY A BUYER BROKER'S COMMISSION
As mentioned above, sellers still have the option to compensate a buyer’s broker, whether that’s disclosed upfront or determined through negotiations. Many sellers will choose to fund some or all of the broker-broker compensation because it will generally expand the pool of potential buyers and facilitate a transaction. Ultimately, though, it is up to the seller.
OFFERS WILL LIKELY INCLUDE DIFFERENT COMPENSATION SCENARIOS
Since the majority of homebuyers work with a broker, sellers should expect to receive offers that include a request to fund buyer-broker compensation. It’s the listing broker’s job to help the seller evaluate the terms of each offer – including broker compensation – to achieve the best possible outcome for the sale.
Bottom line, while some things are changing in residential brokerage, many things are not. Most importantly, whether you’re buying or selling a home, your @properties Christie’s International Real Estate agent is here to be your advisor and to represent your best interests every step of the way.
