There is a lot of confusion out there in the world of real estate because of changes mandated nationally on August 17th by the National Association of Realtors® (NAR); particularly concerning commissions and agency relationships. Everyone seems confused – especially potential buyers who have yet to pick a REALTOR® they trust to work with.
Let us clarify one big misconception for buyers first. Buyers are not responsible for paying their agent directly, unless they choose to structure it that way. Many listing firms and sellers know the benefits of taking that responsibility away from buyers so they continue to compensate the Buyer’s Agent.
REALTORS are, in fact, now required to have a written agreement with a buyer we are working with before we can show them any property in person or by live virtual showing. There are different types of agency relationships, including an option for buyers who choose to remain unrepresented by an agent. There are also several ways a Buyer’s Agent may be compensated.
A buyer beginning their search for properties typically starts researching online before submitting some inquiry about a house or by calling the agent on the screen. Other buyers may ask friends for recommendations or another REALTOR® for a referral to an agent near their new destination. Once connected to an agent, a buyer usually asks questions about a house or an area and begins to get a feel for the agent, their knowledge and eagerness to help, and the level of service and assistance the agent may provide the buyer. There should be no pressure for a buyer to sign something obligating them to hire that agent.
Any prospective customer will be presented with the Working with Real Estate Agents Q&A and Working with Real Estate Agents Disclosure at their first substantial discussion with a REALTOR®. You should be asked to sign the Disclosure as a simple acknowledgment that the agent shared it with you. It is not a contract, but an explanation of agency relationships as well as confidentiality which agents only owe to clients under an agency relationship.
Buyers should not feel pressured to sign an any agency agreement before they are comfortable with an agent, nor before they fully understand how the Buyers’ Agent will be compensated and by who. Buyers may continue to talk about properties with multiple agents, and it is possible to even see homes with different agents. Don’t just pick an agent because you want to see a house. You have options!
Buyers have three options concerning their relationship with an agent who may show them properties: (click below for sample forms)
- You may elect to simply acknowledge that you will be an Unrepresented Buyer on the Working with Real Estate Agents Disclosure,
- Buyers may choose to work with an agent only on specific properties the agent shows them via a Non-Exclusive Buyer Agency Agreement, or
- Buyers who are comfortable with a commitment to stick with an agent for any property purchase may elect to sign an Exclusive Buyer Agency Agreement.
NC 12 Realty is ready, willing, and able to schedule showings on our firm’s listings to any potential buyers who do not already have an Exclusive Buyer’s Agent assisting them. We will only ask you to sign the Working with Real Estate Agents Disclosure, noting that you are an Unrepresented Buyer first. This allows buyers to see and learn more about a house, get to know the agent, and ask questions about services the agent may provide to buyers, prior to any commitment to an agent or firm or for payment for their services.
A Non-Exclusive Buyer Agency Agreement does NOT obligate the buyer to pay a brokerage fee either, but it does suggest the agent showing them properties can represent them on purchases of those properties and seek compensation from the listing firm or seller. This agreement may be modified between the buyer and agent if the compensation offered by the listing firm/seller is less than expected – or terminated if you and the agent don’t reach a mutual decision, releasing the buyer and agent from further obligation to one another.
Essentially, an Exclusive Buyer Agency Agreement marries a buyer to their agent for a period of time in a particular market area or for specific properties, and it allows the agent to seek a negotiated fee for their services from a cooperating listing firm or seller – but does obligate the buyer to pay their Buyer Agent personally if the seller won’t cover their fee. All agency agreements clearly state the amount of compensation for your agent’s services which is set by the firm, fully negotiable between buyer and firm, and not set by law.
We should clearly state that ALL of NC 12 Realty’s listings include an offer to cooperate with any Buyer Agents who have clients interested in seeing and purchasing our listings. Our firm continues to ensure that Buyer’s Agents will be paid through our firm for their services, which our sellers and we understand are an asset to both the buyer and the seller in a transaction. Some benefits of sellers covering Buyer Agents fees are that it enables buyers to concentrate on spending their monies on down payments and typical closing costs, rather than figuring out how to pay their agent, it increases the buyer’s purchasing power, it gives more buyers the chance to see and purchase our seller’s homes, and Buyer’s Agents truly do help buyers proceed past the contract phase to actual settlement.
Our experienced, local group of REALTORS® stands ready to help buyers and sellers understand and navigate the new requirements and earn your business. We will have open discussions with buyers about agency options, including your right to remain unrepresented. We will also work with other agencies to confirm compensation offerings from their firms and sellers on any listings you would like to see, and we will clearly convey to buyers which listings will cooperate with buyers and their agents and which ones may expect buyers to pay for their own agent assistance. We can also help buyers consider alternatives to include in their offers to purchase properties that will cover their agent’s fee when the sellers are not extending any Buyer Agent Cooperation.
Call us (252-995-6212), ask questions, and see if we make you comfortable navigating your sales!