The Changing Purchase Process

Many of us have seen articles about the anti trust lawsuit with the National Association of Realtors. The topics is agent commissions, and the common practice of Sellers paying commission for both the buyer and seller agents. The industry.. and Compass ...have mostly settled the claims, and changes to the process will start in just about a week.

In fact, commissions have always been negotiable along with all terms in the purchase contract. Now commissions will have more focus and transparency. The seller's listing agreement has always has been given the option to pay the buyer's agent commission, which is what happens in the vast majority of cases. Commission options will now fall under the category of seller concessions, which can cover many items that effect the actual cost to purchase a house. Examples are buyer's agent commissions, closing costs, repairs, insurance requirements such as knob and tube electrical removal, and government required sewer replacement.

The buyer's purchase offer specifies who pays for most items, and there is now a specific line for commissions. Of course, purchase price is the most important factor of the 17 page contract. There's many factors to negotiate, and the buyer may negotiate that the seller covers other costs under the offer  price, including the buyer's agent commissions. No one has to pay for anything, it's all part of the negotiation.

An important document to know about is the Buyer Representation Agreement. The idea is to provide full transparency to buyers, and is required for a buyer to enter a property with an agent. It's a mutual commitment for the home search and purchase process. One of the lines shows the buyer's agent commission, which is often 2.5%.  With that, the buyer commits to pay their agent's commission unless it is paid by the seller. This agreement becomes part of the purchase offer that may specify the commission is paid by the seller.

Does the buyer have to pay their agent's commission if the seller will not? It's just like the purchase price in the contract; the buyer can walk away from the offer if they don't agree to the terms.

Would you like more information about this and the Marin real estate market? Contact me or a member of the team! My cell is 415.336.8676,  Amy is at 415.302.3162, and Julie is at 415.310.6019. We can speak on the telephone or meet in person. We're here for you.