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Buyers Agent | Modern Home Buyers Guide

Navigating Buyer Agent Agreements and Compensation Post-NAR Settlement

As the real estate landscape evolves, the recent NAR settlement has introduced new dynamics in how buyer agents are compensated.

Buyers' agents can navigate the new NAR settlement rules effectively by being transparent with clients and integrating these strategies.

Partnering with a professional lender (me!) to make sure your compensation doesn't hinder your clients' offers on homes with limited or no commission. Let's work together to make home purchases transparent, stress-free, and ensure your clients can buy any home on the market. 

By understanding these options, agents can help buyers can make informed decisions and can better assist their clients in navigating these changes.

These creative compensation structures will help you adapt to the new norms and ensure a smooth home-buying process.

1. Seller Compensates Both Agents Equally (Same as prior to NAR Settlement)

  • The seller agrees to compensate the listing agent and the buyer's agent individually
  • This compensation structure must be disclosed to both parties. Unlike previous practices, it clarifies that the seller is paying both agents directly.

 2. Buyer Reduces Down Payment to Pay Buyer's Agent Commission (Finance in Mortgage Balance)

  • The buyer offers a fair purchase price but reduces their down payment by, using these funds to pay the buyer's agent commission.
  • The buyer adjusts their financing to allocate funds for the agent's commission from their down payment.

3. Buyer Increases Purchase Price to Cover Buyer's Agent Commission (Built into Purchase Price)

  • The buyer increases the offer price and requests that the seller pay this increased amount as the buyer agent's commission.
  • The increased purchase price covers the buyer's agent's commission, effectively transferring the cost to the seller through the transaction.

 4. Buyer Pays Buyer's Agent Compensation in Cash

  • The buyer agent negotiates the best purchase price and pays their agent's commission in additional funds to close.
  • The buyer directly compensates the buyer's agent without increasing the transaction amount.

Implementation Considerations

  • Transparency: Ensure all parties know and agree to the compensation structure.
  • Documentation: Clearly outline the agreed compensation method in the Buyer Broker Agreement and other transaction documents.
  • Compliance: Adhere to the new NAR rules and local real estate regulations.
  • Education: Inform clients about these options to help them make informed decisions and understand their financial commitments.

I'm here to help!

Becky Elder

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