When you buy a home, your real estate agent helps you through the process, from getting a loan to closing the deal. But how does your real estate agent get paid? This is an important question, especially with some big changes coming soon.
Traditionally, the seller’s agent negotiates the commission with the seller and then shares it with the buyer’s agent. But starting August 17, 2024, this will change. New rules from the National Association of REALTORS® (NAR) and Louisiana State Law say that buyer agents must have a Buyer Brokerage Agreement (BBA) signed by you, the buyer before you can tour a home.
This means that instead of the seller’s agent negotiating how much your agent gets paid, you and your agent will decide together. You will talk with your agent and agree on how much to pay them. This is called buyer-agent compensation.
In the Buyer Brokerage Agreement, there will be a section about buyer agent compensation. Once you and your agent agree on the amount, there are a few ways to pay it:
- Buyer Brings the Funds to Closing: You bring the money to pay your agent when you close the deal on your new home.
- Buyer Negotiates the Obligation to Be Paid by the Seller: You can ask the seller to pay your agent’s fee as part of the overall deal.
- Buyer Pays a Portion, and Seller Pays a Portion: You and the seller can split the payment. This way, both of you share the cost.
It’s important to talk with your agent about these options to see which one works best for you. Your agent can help you decide based on your financial situation, the market, and the property you want to buy.
These changes are designed to bring greater clarity and fairness to the home-buying process. By discussing buyer agent compensation directly with your agent, you gain more control over the costs involved, ensuring that the payment structure aligns with your budget and needs. This open communication helps build a stronger, more transparent relationship between you and your agent.
Starting August 17, 2024, buyers like you will need to understand and talk about buyer agent compensation more. Having a clear and honest discussion with your agent about how real estate agents get paid, these new rules, and your options will help you handle this new system smoothly.
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