The Changing Purchase Process

Many of us have seen articles about the anti trust lawsuit with the National Association of Realtors. The topic 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 started August 17th.

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

The buyer's purchase offer language specifies who pays for each item, and there is now a specific line for compensation. Of course, purchase price is the most important factor in the 17 page contract. There're many costs to consider, and the buyer can negotiate that the seller covers other costs with the offer  price, including the buyer's agent compensation. 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 or tour virtually 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.  With that, the buyer commits to pay their agent's commission unless it is paid by the seller. This agreement may be included in the purchase offer with an option to 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 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.