As more brokers and agents consider moving away from the collaborative compensation model, many are grappling with a number of thorny issues, the most vexing of which may be: What should I do if the seller is only willing to pay part of the buyer’s agent fee, or not at all?
According to Anthony Lamacchia, he is Lamacchia Real EstateOver the years, he and his agent have seen controversies over buyer’s agent fees, underscoring the importance of signing a buyer’s representation agreement, which can soon be required. national association of realtors (NAR) National Council Litigation Settlement Agreement.
“That’s why all of this has to be negotiated before the sale,” Lamacchia said. “Lawyers, Ministry of Justice Everyone agrees that it’s better for the buyer and saves the consumer money, but I don’t know that any buyer wants to see a house that costs money out of pocket. So you need to have the conversation again when the offer is made, and then again when the contract is reinstated. You have to make sure you are on the same page.
While some buyer’s agents are tired of discussing their compensation with clients, industry leaders say negotiating compensation is no different than any other negotiation in which agents regularly engage. Sharran Srivatsaa said whether early move-in is possible or if appliances can be included in the deal. real brokerage.
“If the buyer can’t or won’t pay the agent out of pocket, maybe the buyer is willing to increase the purchase price to include it in the deal. Or, if the seller doesn’t have to pay any buyer’s agent fees, they might go for a lower price. , so buyers have money to pay buyer’s agent fees,” Srivatsaa said. “But the bottom line is, buyers don’t like surprises, and a buyer’s agency agreement ensures the buyer won’t be surprised by the money they owe their agent.”
Although the buyer’s representation agreement will specify the services the agent will provide and the compensation for those services, the agent should not expect it to always be this way.
Real estate attorney and executive Chuck Cain said agents will inevitably encounter a situation where a buyer and his or her agent agree to pay a 2 percent fee, but the seller of the house they’re offering on Only a 1.5% fee is promised. FNF family of companies.
“That buyer’s agent will turn to that buyer and say, ‘Well, I want you to take the other half of the money?'” I don’t think that works very well in the business world. The buyer’s agent will eventually give in to them and probably eat the difference. They can hold them to the amount specified in the contract, and they have the ability to do so. That customer will then never refer their friends to them, and they might even get some ugly Google reviews.
If agents are unwilling to compromise, this could become a regular occurrence in the industry.
“Conflict between buyers and buyer’s agents is inevitable because not all agents are competent, honest or professional. Not all buyers are upright, ethical people,” said industry analyst Rob Hahn wrote in his book. notorious robber Email Newsletter. “The top buyer’s agents who bring a ton of value will receive the full contract amount (per the buyer’s agent agreement). Those unprofessional idiots who create more problems than they solve will find themselves paid less.
Hahn believes that over time, the industry will figure this out and incompetent agents will be weeded out, and when they inevitably see their pay cut after providing subpar service to clients, they Won’t get sympathy from highly skilled agents. Still, Hahn doesn’t necessarily anticipate a wave of lawsuits over such disputes.
“In some cases, buyers will say, ‘I know I promised you 2.5 percent, but man… my moving costs are much higher and my car just damaged the transmission… so… uh… 500 What about dollars? Even honest and professional agents face a no-win situation: sue the client, what does that mean for the reputation and the field? Or suck it up and let the buyer walk away or close the deal at a significantly lower price? .
James Dwiggins CEO Next homepageAlso arguing that such disputes will inevitably arise, and sometimes have already arisen, he believes there is a simple solution: if using an agent, buyers should only buy homes where they can also pay the agent’s fees out of pocket if necessary.
“Prior to settlement, 16 states required buyer representation agreements, so this is already happening,” Dwiggins said. “The reality is, if a buyer wants to buy a house and they can’t afford the agent’s fee, then they can’t buy that house unless they can get the house to match the offer. If they sign an agreement with an agent that says they’re going to pay X amount , and if they can’t get the seller to pay that amount, then they can’t buy.
