New Buyer Agency Rules and how it affects You the Home Buyer --How they Work and Get Paid 


Buying a home is the largest purchase most Americans make in their lifetime.  Don’t do it alone.  The price you potentially could pay for an agent’s professional services under the new real estate agent legislation is much less than what you will benefit from professional representation.  Most home buyers need a professional on their side to navigate the most significant and complex purchase of their lives.

In 2023, a pivotal lawsuit against National Association of Realtors (NAR) challenged the established norm, leading to a groundbreaking settlement in March 2024. This settlement introduces a significant shift, offering enhanced flexibility around agent fees and altering traditional compensation structures. It reflects a move toward greater consumer choice in sellers' and buyers' real estate transactions.

The compensation structure class action settlement plaintiffs’ lawyers would like to dismantle – one in which listing brokers offer compensation to buyer brokers for finding a buyer – claims would promote consumer choice, encourage market competition, and boost access to homeownership. On a multiple listing service (MLS) platform, sellers can have their home seen by more buyers, ensure they receive the best offer and sell it for the best price. Listing agents can no longer advertise what they are willing to pay the bueyr ‘s agent.

Instead, now, buyers must enter a buyer agency agreement with an agent. Which includes disclosing how the buyer agent will be paid.  The buyer agent can seek compensation from the seller through the offer process, but if denied the buyer agent will then revert to their buyer under their agreement to pay the agreed fee.

At the time of writing this blog, Veterans using their VA Loan entitlements are forbidden by VA loan guidelines to pay any commissions. If a seller refuses to compensate the Veteran’s buyer agent, it would leave the agent unpaid and the overall concern is many agents will steer away from helping Veterans find a home. 

Unlike popular television shows, agents invest significant time and money helping a consumer find and get a successful offer accepted on a home.  Agents help buyers and sellers navigate a maze of forms and complex paperwork; coordinate mortgages, coordinate and attend inspectors, deal with other agents, title/escrow companies, appraisal issues.  All this to ensure that their clients’ interests are represented in pricing, negotiation and closing.  On the average transaction, an agent looks at 20-30 billable hours to bring the deal to closing.  No one wants or can afford to invest countless hours for no compensation.

It's important to note NAR does not set commission amounts, contrary to the false claims of those mischaracterizing our industry. It is up to the listing broker and their client how much compensation to offer a buyer broker, and they are free to offer any amount.

My recommendation is for a buyer to never go unrepresented and understand that there is no shortcut through the listing agent. The listing agent works for the seller.  The listing agent has essentially the same requirement to enter a buyer agency agreement if contacted by a buyer on their listed home.  To figure all this out, recommend you contact the Veteran Real Estate Benefits (VREB) Program and Agent Network and let us or one of our top agents sit down and work through this new law/agency agreement process. www.vrebnetwork.com 

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Earn up to $7500 in membership rewards when you are active, retired or have previously served in the military. (Non-Veterans can earn a one year home warranty for a home sale that exceeds $250K. Veterans must join our free Veterans Real Estate Benefits Program. Restrictions apply and vary by state. Our Network Lenders and Agents pay a marketing fee to participate in program. VREB program benefit is only available with the purchase and/or sale of your home through the use of a program-introduced real estate agent. The actual amount you receive is based on the purchase and/or sale price of your home. The program award may be reduced in certain transactions with reduced agent commissions (including many new construction, For Sale by Owner). Your assigned agent can help you identify any transactions where the award would be reduced. All real estate commissions are negotiable. Other terms and conditions may apply. This is not a solicitation if you are already represented by a real estate broker. Program terms and conditions are subject to change at any time without notice. Additional terms, conditions, and restrictions apply and will be provided in your VREB Membership Agreement.
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