Real Estate Buyer Agency Changes Are Confusing
If you're thinking about buying or selling a home, you may have heard about recent changes in real estate laws across the U.S. These changes affect how buyers and sellers work with real estate agents, and they’re causing a lot of confusion for everyone. The biggest issue? Who pays the buyer’s agent commission. Here is some information for Buyers.
What’s Changing?
In many states in the past, when a home was sold, the seller authorized the sharing of the Listing commission with the buyer’s broker and agent. This helped buyers because they didn’t have to pay their agent out of pocket, and because lenders allowed the commission to be included seamlessly in the financing. However, new legal decisions and laws in several states have changed this system as of August 2024. Most states are now requiring buyers to sign written agreements with their buyer agents and, in some cases, pay their agent’s commission themselves. This might be described as agents and brokers now listing buyers as well as properties.
The changes are aimed at increasing transparency, so buyers fully understand what services they’re getting, how much they’re paying, and so sellers don't appear to be paying buyer agents who are negotiating against the sellers' interests. But for many buyers, and sellers, this is new and unexpected.
Why Are Buyers Confused?
They’re not sure if they need to pay their agent. In some cases, sellers may still "cover" the buyer’s agent commission, but in others, buyers might be responsible to pay the buyer agent commission. In my state, each transaction is different depending on the seller, the offer, the amount of the buyer agency contract, etc.
Home prices are already high. Buyers worry about costs on top of down payments, closing costs, and moving expenses.
Different states have different rules. Since real estate can laws vary by state, buyers moving from one area to another may find the process very different from what they expected. Nationally, the real estate business has moved to require buyer agency agreements (contracts) before a buyer could even look at a property with an agent. In states where this is a new development, buyers and sellers can be confused. On top of that, states like Alabama just past a law that allows buyers to look at property without a buyer agency contract, thus adding to state by state differences.
So What Should Buyers Do?
If you’re buying a home, here’s how to enter the process:
✅ Ask your agent upfront how they get paid. The professional licensee should explain whether the seller covers their fee, or if you need to pay, or if the buyer agent will try to get all of some of the buyer agent fee from the seller through the transaction, etc..
✅ Read and understand your buyer’s agreement. Make sure you know what services your agent will provide and what you’ll owe, and what the possible sources of the buyer agency fee is/are.
✅ Compare your options. Some buyer agents may offer flexible commission structures, rebates, discounts, or other incentives.
As real estate laws continue to evolve, it’s important to stay informed. An experienced, professional, full-time licensee will help you navigate the changes so you can buy your dream home with confidence! And they are worth their fee.🏡✨
I'm happy to refer you to an experienced, professional, full-time licensee if you need help picking one. Click here for the Buyer Agent Request Form
Best wishes, Heath
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