In case you missed it, the National Association of REALTORS, in response to a lawsuit filed by the United States Department of Justice, has agreed that the co-op compensation offered to buyer agents will be publicly disclosed soon.
From the NAR-DOJ agreement
In accordance with the MLS system’s long-standing focus on creating an efficient, transparent marketplace for home buyers and sellers, the amount of compensation offered to buyers’ agents for each MLS listing will be made publicly available. Publicly accessible MLS data feeds will include offers of compensation, and buyers’ agents will have an affirmative obligation to provide such information to their clients for homes of interest.
Relatedly, the rule changes re-affirm that MLSs and brokerages, as always, must provide consumers all properties that fit their criteria regardless of compensation offered or the name of the listing brokerage.
While NAR has long encouraged buyers’ agents to explain how they expect to be paid, typically through offers of cooperative compensation from sellers’ agents, there will be a rule that more definitively states that buyers’ agents cannot represent that their services are free to clients.
What does this mean for buyers’ agents?
While it hasn’t happened yet, soon enough buyers will be able to see the commission offered to you on every property. The days of agents skipping over listings that pay less will be over.
Also, buyers’ agents will no longer be able to claim that their services are free. Let’s be real, at the end of the day commission is baked into the sale price of a home. This increases the cost to the buyer, so they really are paying for the privilege of having an agent represent them.
What should you do?
Learn to explain how REALTORS get paid.
At the end of the day, the commissions are part of the sale price of the property. The buyer is paying a portion of that commission as part of their purchase. During your initial buyer consultation, explain how you get paid, when you get paid, and how much you are willing to work for.
There’s nothing in the proposed changes that says you have to work for less money. But clients should know upfront if you expect them to cover any difference between the commission offered and what you expect to be paid. Buyer brokerage agreements outline your expectations, help facilitate the conversation, and allow your buyer to choose whether or not they want to view properties that pay less than your agreed-upon rate.