News > Changes With Real Estate Commissions

You may have heard in the news that the National Association of Realtors and several large real estate brokerages have reached a settlement in several lawsuits that will change the nature of how real estate commissions are paid. In the current world, though never required, seller's agents could offer to pay buyer's agents, and the amount they offered was easily viewed through the MLS. Starting in mid-August of 2024, commission offers to a buyer's agent will no longer be posted on the MLS. Additionally, all buyers agents will need a compensation agreement in place before they can show any property to a buyer.

How Will This Affect Buyers?

Buyers will see 2 immediate changes in August, 2024:

Buyers will be asked to sign a representation agreement before they are shown any homes by a buyer's agent.

All REALTORS in Arizona must do this. So before seeing homes with a real estate agent, you will sign an agreement that states which agent will represent you, how the agent will represent you, and how much the buyer's agent will get paid for providing these essential buyer services.

No commission offers to buyer agents from sellers can be published on the MLS.

In the past, the commission offered to the buyer's agent from the seller was listed in the MLS. After August, any buyer's agent commissions that the seller is willing to pay can be specified in the purchase contract. This becomes another negotiated item, along with purchase price, closing costs and several other items.

How Will My Buyer's Agent Get Paid?

Your buyer agent's commission can get paid in one of three ways:

• The seller pays your agent's commission. This is the traditional way a buyer agent gets paid. This amount will be stated in the purchase contract rather than through the MLS as it was in the past. The seller would pay the commission directly out of their proceeds from the sale at closing.
• The seller offers a closing cost concession. Out of that concession, some or all of that amount can be used by you to pay your buyer's agent. This option will need to be negotiated in conjunction with what your lender allows.
• The seller does not contribute towards your agent's commission and you are responsible to pay your buyer's agent commission at closing time.

Since sellers will not be able to specify in MLS what they will offer to a buyer's agent, the buyer agent commission will usually be negotiated in the purchase agreement. Your buyer's agent will negotiate one of the three options listed above, depending upon your wishes, and if the seller does not want to pay your agent's commission, then your agent can negotiate the price of the property down to cover that commission, or you can choose to purchase another property where you can get a better deal.

The advantages buyer agents have to their client is demonstrated every day with our buyer clients. Besides having access to a knowledgeable real estate professional to guide you in finding the best condo, townhome or single family residence, negotiating the best price and making the escrow process as smooth and convenient as possible, you can also feel comfortable in knowing you have someone looking out for your best interests, rather than being subjected to the competing interests of the seller and the seller's agent.

Buying a condo or home can be complicated, but with the right team on your side, we can make it as smooth and stress free as possible while still meeting your real estate goals. We can answer any questions you have about this process or the entire process of buying real estate in Arizona. Just Contact us and we'll arrange a time for a phone call or meeting at your convenience.

 

Though not guaranteed, information and statistics in this article have been acquired from sources believed to be reliable.

Related Links

• Tempe Condo Buyers Guide