How to Navigate Buyer-Agent Commission Changes

Sellers are now reconsidering whether to offer agent compensation under new commission structures.

How do the recent changes in buyer-agent commission impact your real estate transactions? Understanding these shifts is crucial for buyers and sellers as the market evolves. This can be quite confusing, that’s why I’m here today to go over these changes and how these affect your buying or selling goals. Here’s what you need to know:

How buyer-agent commissions worked before. Previously, the buyer-agent commission was pre-negotiated between the listing agent and the seller when the listing was signed. This arrangement meant that the seller agreed upfront to pay a certain percentage to the buyer's agent upon the sale of the home.

New negotiations in commissions. Now, everything is becoming negotiable. The seller may offer a commission—or they may not. Sometimes, it's dictated in the listing agreement, while other times it's not provided. This shift means that the dynamics of how buyer-agent commissions are handled are changing significantly.

"Most sellers continue to offer commissions to buyer's agents, so it's still business as usual for many transactions."

What sellers are doing now. Here's what I've found over the last four weeks: Most sellers are saying, "Let's offer a commission." They understand that offering a commission helps attract more potential buyers and facilitates a smoother sale. Sellers want to sell their homes quickly and are willing to maintain the traditional approach.

What it means for buyers. So, what happens in the other 10 to 15% of cases when a seller isn't offering a commission? It simply means that the buyer and the buyer's agent must negotiate the commission as part of the contract. This could be handled as a concession or a closing cost credit, or the buyer might pay it directly.

At Jose Medina and Associates, we're committed to working with buyers to ensure they find the right house while navigating these commission conversations. We're here to help you understand your options and make the best decision for your budget. Whether you're on the buying or selling side and want professional counsel on making these new commission structures work for you, feel free to email or call me. I’d love to chat with you and guide you through the process.