Discover how new commission rules can save you big money! Buyer agent commissions are now fully negotiable and you are no longer beholden to paying a set commission to a buyer’s agent of 2.5% to 3% just to have them work against you negotiating down your price.
Buyer agents will have a Buyer Brokerage Services Agreement with their client guaranteeing them a certain commission. That commission can be negotiated as part of the offer and paid from the seller’s proceeds, the buyer can pay their agent directly, or a combination of both.
Fact: Real estate agent commissions are not regulated in any state and are ALWAYS 100% negotiable.
Do I have to offer a buyer agent commission?
The short answer is no. The NWMLS eliminated the requirement that a seller must offer compensation to the buyer's broker. Therefore, sellers can still offer a Buyer Agent commission or none at all. Real estate commissions are always negotiable.
Are commissions negotiable?
Yes, real estate commissions are always negotiable. The seller may choose to offer buyer agent commissions, or not. It can be a percentage or a flat dollar amount. The buyer may also negotiate commissions during the negotiations to purchase the home. In all cases, the purchase and sale agreement will clearly state which parties are paying commissions, the amount, and who receives the commission.
Why did commissions change?
For more than 30 years, the seller paid the listing firm, who shared the commission with the buyer brokerage firm. This method was a vestige from the past where every broker represented the seller and brokers did not work directly for the buyer. That ended in the mid-1990s with the creation of buyer agency. Yet, "commission sharing" remained.
The recent changes further enhance transparency in broker compensation, create additional opportunities for consumers and brokers to discuss and negotiate compensation, provide greater flexibility for consumers and brokers when listing and purchasing real estate, and promote innovation and competition among member brokers. These revisions are critical to the evolution of the real estate brokerage industry and will help brokers and agents to better serve their clients for years to come