Dealing With Buyer’s Agents And Compensation

In the real estate world, there are confusing compensation models. For example, when selling a home, an agent can expect to receive 3-6% of the selling price of the home. When it comes to buyer’s agents, there can be confusion about expected compensation and a recent court case challenged whether there should be compensation at all.

The Sitzer/Burnett trial challenged MLS rules and the real estate compensation model. The plaintiffs argued that buyer representation is obsolete and should not be available to the average buyer. It should only be afforded to wealthy buyers who can pay for the services out of pocket. They should not be paid for by home sellers or their agents.

In the trial, the plaintiffs also alleged that commission rates are too high and that buyer brokers are being paid too much. They also claimed that the rules of the National Association of Realtors (NAR), along with the corporate defendants’ practices, lead to fixed pricing.

Until there is a ruling, real estate professionals are advised to follow some tidbits of advice. For example, they should continue using buyer representation agreements. These documents open up the opportunity to have important conversations with consumers about your value and the services you provide.

Real estate professionals also need to stress the negotiability of their compensation. Clients should be made aware of their choices when it comes to how the buyer agent will be compensated, since there are no fixed rules. The compensation could be paid through an offer of compensation from the listing agent or by the seller. The buyer could also opt to pay for the services directly. There could be a combination of these sources as well.

Brokers should also let sellers know how it works in their favor to make an offer of compensation to the buyer’s agent. The home purchase is more affordable for buyers, which widens the pool of potential buyers for the property and gets the home sold more quickly.

In any case, compensation for buyer’s agents has always been negotiable. There is no standard or set amount for agent compensation, and the NAR doesn’t tell agents what to charge. Instead, brokers should use their listing and buyer agreements to help clients understand exactly what services and value you are providing as well as the amount the agents plan to charge.

Keep Your License With Help From a Tampa Real Estate Broker License Lawyer

When selling a house, clients may be confused about buyer’s agents and the processes involved. Having conversations and contracts in place can help prevent confusion.

The real estate field is full of ethical issues that professionals need to be aware of. Keep your license with help from a Tampa real estate broker license lawyer from The Law Offices of David P. Rankin, P.A.  I have been involved in several hundred license discipline proceedings before the Florida Real Estate Commission and was the attorney for the Greater Tampa Realtors for 18 years. To schedule a consultation, call (813) 968-6633 or fill out the online form.

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