There are important changes happening in the real estate industry this month. National Association of Realtors and Multiple Listing Service (MLS) Implement new rules About how real estate agents communicate real estate fees. These changes provide greater transparency and competition around fees—goals that Redfin has long supported.
We know this can be confusing, but Redfin agents are ready to answer any questions you have and professionally guide you through the buying and selling journey.
So, what exactly has changed?
In most transactions, the home seller typically pays a commission to both their agent (the listing agent) and the agent representing the buyer (the buyer’s agent). While it has always been the seller’s decision whether and how much to compensate the buyer’s agent, the process surrounding this issue has changed in two main ways:
- Reveal buyer’s agent fees: Buyers will now need to agree to their agent’s fees before viewing a home. This sets the maximum amount of money you can pay to your buyer’s agent when you purchase a home.
- Buyer’s Agency Fee Advertisement: Many MLSs, the repositories used by agents to share and market listings, are eliminating offers to compensate buyer’s agents. Sellers can still pay the buyer’s agent, but they cannot advertise any compensation offers in the MLS unless local rules specifically allow it. As a result, buyer’s agent fees will increasingly be negotiated as part of the offer.
What does this mean for sellers?
Sellers will still discuss with their listing agent any compensation they want to offer to the buyer’s agent. We anticipate that in many cases buyers will continue to ask sellers to assist in paying the buyer’s agent’s fee as part of the offer. The seller will evaluate the offer and negotiate as they would any other terms.
What does this mean for buyers?
As a buyer, you will have an upfront conversation to find out what your agent will charge. Your agent will ask you to sign an agreement regarding their fees before viewing the home. You can still ask the seller to pay your agent’s fee as part of the offer. Depending on how you structure your offer, the seller may agree to compensate your agent directly or may provide closing concessions that you can assign to your agent at closing.
As a buyer, why do I need to sign the agreement so early? I just want to see the house but I’m not ready to pay the agent fees yet.
New industry-wide rules require a written agreement explaining an agent’s fees before a tour. Unless state law provides otherwise, buyers are not required to sign an exclusive, binding agency agreement to view a home. Different brokerages have different practices and policies. Redfin’s approach is transparent and provides flexibility to buyers.
Does a Redfin Tour require a Buyer’s Agency Agreement?
Unless your state requires otherwise, Redfin will add a simple fee agreement for buyers to sign when you request a viewing from a Redfin agent that discloses the fees we expect to charge at closing. Many sellers will pay this fee for you at closing.
This fee agreement does not restrict you from working with a Redfin agent. Once you have the opportunity to meet with your agent in person, your agent will ask you to commit to working with Redfin. Buyers who commit to working with Redfin before the second tour will receive a 0.25% discount on fees.
How much does Redfin’s buyer services cost?
Redfin’s buyer fees vary by market. Our pricing is designed to give buyers a competitive advantage and we’ll offer a 0.25% fee discount if you commit to Redfin before your second tour. By reducing our fees by 0.25%, we can make your offer more attractive to sellers. Just like offers and contingencies, the seller will compare the buyer’s agent fees required for each offer and factor that into the decision.
What if the seller doesn’t agree to pay my agent? Am I responsible for paying the attorney fees out of pocket?
Many buyers use up all their financial resources for a down payment and have no extra cash to pay agent fees. By now, most sellers understand this and are often willing to pay the buyer’s agent fees out of the sale proceeds. If the seller doesn’t agree to pay your agent’s fee or only agrees to pay part of the buyer’s agent’s fee, you can modify your offer, agree to pay your agent directly at closing, or walk away. Regardless, before you sign a contract to purchase a home, you’ll know the costs so you can make an informed decision.
It’s important to have a good relationship with your mortgage lender so they can help you structure your offer in a way that suits your financial situation. Redfin’s mortgage partner, Bay Equity, has loan officers ready to guide you through the process.
Do I need to pay a buyer’s agent commission when I sell my home? Should I provide one?
The seller always has the ability to decide how much compensation, if any, to pay to the buyer’s agent. As a seller, you have the following options:
- You can leave it open-ended and ask the buyer to make their best offer, which may include buyer’s agent compensation, and then negotiate from there.
- Alternatively, you can offer unsolicited commissions or offers that buyers can use to pay their agent’s fees as part of your home marketing strategy. This message can still be communicated to the buyer and agent when the buyer’s agent contacts the listing agent to schedule a showing. Whether and how much a commission is offered may depend on a variety of factors that your Redfin agent can help you with.
How do I know what a fair price for a buyer’s agent is?
Buying a home is a big commitment; you should focus on finding the best agent at the best price. Redfin agents have a wealth of experience, and we post their sales and customer reviews online so you can see them for yourself. Redfin agent average sales volume more than three times Several serve as typical agents for other major brokerages. We set our prices to be as competitive as possible. Contact an agent to learn more.
*Bay Equity Home Loans is a division of Redfin. You don’t need to work with a Redfin agent to use Bay Equity’s services. For more information, read our Related business disclosure.
