Offers of Compensation to Buyer’s Agents
In August 2024, the National Association of Realtors (NAR) settled a lawsuit that brought significant changes to how buyers work with their real estate agents. Here’s what that means for you as a home seller:
- Compensation offered to a buyer’s agent will no longer be displayed on the MLS or included in California Association of Realtors (CAR) forms.
- All buyers are now required to sign a written buyer-broker representation agreement before viewing any homes. CAR provides two forms for this: the Buyer Representation and Broker Compensation (BRBC) agreement and the Property Showing and Representation Agreement (PSRA).
- Sellers are not required to offer compensation to a buyer’s agent in order to list on the MLS.
Why Should You Still Consider Offering Compensation to a Buyer’s Agent?
Expands Your Buyer Pool – Most buyers cannot afford to pay their agent’s fee on top of other homebuying costs, such as the down payment, closing costs, moving expenses, post-purchase repairs, etc. If a seller chooses not to pay a buyer’s agent commission, fewer buyers may be able to afford your home. Most buyers rely on their agent’s commission being covered by the seller—without it, they may need to pay out of pocket, reducing their purchasing power and shrinking the pool of potential buyers for your home.
Increases Your Chances of Getting Stronger Offers – When buyers don’t have to factor in paying their agent’s fee, they may have more room in their budget to offer a higher purchase price or better terms. This could lead to stronger, more competitive offers for your home.
Leads to a Smoother Sale – Working with experienced and qualified buyer’s agents helps facilitate a seamless transaction, reducing the likelihood of complications, escrow delays or financing issues.
What Are Your Options for Compensating a Buyer’s Agent?
- Sellers can choose not to offer buyer agent compensation, but the buyer may request that the seller pay the commission in their offer.
- Buyers can pay their agent directly, without any contribution from the seller.
To better understand the advantages and drawbacks, contact us today.
Schedule a Consultation
Clear answers. No pressure.
