Important Changes in Buyer Broker Agreements

If you’ve been following the news, you’ve likely heard about the new rules for real estate agents regarding commissions and buyer agreements.

As of August 17th, 2024, a significant change will occur in how Realtors have conducted business for nearly 100 years. Traditionally, the compensation for buyer’s brokers was clearly published in the MLS (Multiple Listing Service). This is no longer the case.

The compensation details are now private, and seller’s agents must share this information individually for each listing, outside of the MLS.

Additionally, buyers must have a formal agreement with their agents before viewing any property, whether in person or virtually. This agreement will outline the maximum compensation the agent can receive in a transaction and specify who will pay that compensation.

Buyers Essential Have Four Options

1. Limit Property Showings:

Buyers can instruct their broker not to show them properties where the seller isn’t offering compensation to the buyer broker. This means any listings where the seller won’t pay the broker’s commission won’t be shown to the buyer.

This option may be common since buyers are not used to paying their agents, but it could limit the number of homes they see and result in fewer offers for sellers.

2. Pay the Broker Directly:

Buyers can agree to pay their broker directly on any property they purchase, regardless of whether the seller is offering compensation.

This option reduces the seller’s closing costs but is likely to be the least chosen. Buyers who choose this will factor the broker’s fee into their offer and negotiations.

3. Include Compensation in the Contract:

Buyers can ask their broker to include a clause in the sales contract that requires the seller to pay the broker’s commission if it’s not already offered.

This option keeps the traditional approach, where the seller pays the buyer broker’s fee.

4. Split the Compensation:

Buyers can agree to pay the difference between the maximum compensation agreed upon in the buyer broker agreement and whatever the seller offers.

This option shares the responsibility between the buyer and seller, ensuring the broker is fully compensated.

The New Buyer Broker Agreement Form

We’ve developed a new form to reflect the latest changes in real estate rules regarding commissions and buyer agreements. Please note that this is all very new to us, and we may revise the form in the future to better meet your needs as we adapt to these changes. 

Current Trends in Buyer Broker Compensation

What we’re seeing right now is that most sellers are still offering buyer broker compensation—about 99% are continuing this practice. However, there may be times when we encounter a seller who chooses not to offer compensation. Rest assured, as your agents, we’re prepared to work with you and ensure you get the best possible deal.

Our View on Offering Buyer Broker Compensation

In our view, while sellers are no longer required to offer compensation to buyer brokers, it’s in the seller’s best interest to do so. From our experience, offering this compensation typically leads to more showings, more offers, and ultimately, a higher net sales price for the seller.

With the recent changes, listing agents now need to negotiate this compensation, making it even more important to ensure the seller gets the best possible outcome. Based on our years of experience in the Florida Keys real estate market, we strongly believe that offering buyer broker compensation maximizes exposure and helps sellers achieve the highest net sales price.

Conclusion

While the new regulations have shifted how compensation is handled, we remain committed to guiding you through this evolving landscape. Offering compensation to buyer brokers continues to be a strategic move that benefits sellers by attracting more buyers and potentially achieving a higher sale price.

With our extensive experience in the Florida Keys real estate market, we’re here to ensure you navigate these changes effectively and secure the best possible outcome.

Prumo & Carden

Amy’s success as a Florida Keys Elite Agent and Diamond Award Winner is truly awe-inspiring. With over a decade of experience in the real estate industry, she has cemented her position as a trailblazer and pioneer. 

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