What Homebuyers and Sellers Need to Know About Brokerage Industry Changes

Starting August 17, 2024, significant updates will impact how real estate agents work with buyers and sellers in our industry. These changes include the requirement of Buyer Broker Agreements and a shift in how buyer-broker compensation is handled in the MLS (details on that below). At @properties & the Justin Lucas Group, we’re embracing these shifts and are ready to guide you through this evolving landscape with confidence. Here’s what you need to know:

Buyer Brokerage Agreements Are Now a Must

Just as sellers sign a listing agreement that outlines their broker’s services and compensation, buyers will now need to sign a buyer-broker agreement before an agent can assist with brokerage-related tasks—such as searching for properties or scheduling showings, even if it’s for just one property.

Although this may seem like a big change, buyer-broker agreements have been commonly used in the industry for years. This update simply makes them standard practice. The benefit? It protects buyers by clearly defining the broker’s services and compensation structure.

Flexible Options for Buyer-Broker Compensation

With buyers and sellers now determining their respective broker compensation independently, buyer-broker compensation will no longer be displayed in the MLS.

For buyers, this means there could be uncertainty about whether a seller will cover all or part of their agent’s fee. When making an offer, buyers can still request that a portion of the sale proceeds be used to cover the broker’s fee or opt to pay directly out of pocket—or a combination of both.

If covering a broker’s fee upfront isn’t practical for some buyers, they might consider adjusting their down payment to accommodate this cost. Additionally, there may be credits or grants available through certain loan programs. We have many lenders that we can recommend, and they can help you explore your options—just ask for an introduction.

Sellers Can Still Offer Buyer Broker Compensation

Sellers retain the option to pay the buyer’s broker, whether this is decided upfront or negotiated as part of the offer process. Many sellers may choose to fund all or part of the buyer’s broker compensation, as it can increase their pool of potential buyers and lead to a smoother sale. Ultimately, the decision remains with the seller.

Expect Varied Compensation Scenarios in Offers

Since most buyers work with a broker, sellers should be prepared to see offers that include requests for buyer-broker compensation. Your listing agent will play a key role in evaluating all aspects of the offer, including broker compensation, to help you achieve the best possible outcome.

In summary, while certain aspects of real estate transactions are evolving, many remain consistent. Most importantly, whether you’re buying or selling, all of us at the Justin Lucas Group are here to provide expert guidance and act in your best interests every step of the way.