Realtors will be releasing "Buyer Brokerage Agreements- Following NAR Settlement Saturday

In compliance with the recent National Association of Realtors Settlement Agreement, Florida Realtors has unveiled updated Exclusive Buyer Brokerage Agreements (“Agreements”).

Effective August 17th, 2024, all real estate brokers providing services to buyers must ensure the execution of an Exclusive Buyer Brokerage Agreement before any property tours begin.

A significant change is that buyer agents are no longer guaranteed payment from sellers. Moving forward, homebuyers will be responsible for compensating their own agents, with all brokerage fees being fully negotiable. The real estate industry has introduced new contracts to facilitate the payment of buyer agents, whether through commission or fees, either by the seller or the buyer.

Navigating the New Homebuyer Agreement Landscape: Tips for Buyers

If you plan to hire a real estate agent, you’ll now be required to sign a more detailed and extended contract. This agreement will outline the agent’s responsibilities and the compensation structure. These contracts might be referred to as a “buyer agency agreement,” “buyer-broker agreement,” or “buyer representation agreement.”

Key Considerations for Buyers:

• Budget for Agent Fees: Allocate funds for agent services. Speak with local agents to understand typical fees.
• Discuss Compensation Upfront: Clarify the agent’s fee structure and obtain written confirmation.
• Evaluate Your Needs: Decide whether you require full-service representation or a more limited service.
• Negotiate: Remember that rates are negotiable, particularly if you plan to handle some tasks independently.
• Explore Alternatives: Consider new tech-enabled platforms and discount brokerages alongside traditional agents.

The "exclusive right-to-represent" contract is the most common buyer representation agreement, offering the greatest protection to agents. Homebuyers should recognize the substantial time and resources invested by buyer's agents.

Some real estate brokers acknowledge that the transition may be challenging. With every property now having a commission target, many consumers are expected to negotiate every aspect of the Buyer Representation Agreement. While digital-savvy consumers may find the fee disclosure helpful, it’s only the first step in closing a transaction.

Industry experts strongly advise against bypassing professional assistance entirely. Experienced real estate agents play a crucial role in home purchases, particularly in competitive markets.

Compliance Changes…

“Buyer Agent (BA) Agreements” will be mandatory from August 17th, 2024, onward.

Lenders will require all purchase contracts dated on or after August 17th to detail the BAC (Buyer Agent Commission) as specified in the BA Agreement. Alternatively, a copy of the BA Agreement must be included when submitting the Real Estate contract if a realtor is involved to secure a Clear to Close.

While some buyers may initially be hesitant to pay their agents directly, many will soon recognize the value of expertise, especially when agents identify critical issues during a home inspection, potentially saving them from costly mistakes.

Some agents assert that the seller’s offer of commission or concessions is not the deciding factor when writing an offer, emphasizing that negotiation remains possible. Ultimately, sellers will make the final decisions regarding offers and transactions.

Realtors are being warned by various MLS departments that fines of $2,500 will be enforced starting Saturday morning. NO WARNINGS! Showing even one property without a signed compensation agreement will result in a $2,500 fine.

As both consumers and professionals adapt to these industry changes, there will likely be challenges. The transition is expected to take some time, with a period of adjustment anticipated for all involved.