Many Buyer’s Agents offer “Rebates” to their clients. How does this rule change affect that?

Additional options have been added to Buyers Agency agreements to enable the buyer brokerage firm to reduce its compensation and have the seller credit the amount of the reduction to the buyer's obligations at closing.  Note that such credit is subject to approval by the buyer's lender.  Another new option on the form is a simple reduction in the buyer broker compensation paid to the firm.  This option could be used in situations where a buyer and buyer's broker agreed to a lesser amount of compensation in a buyer representation agreement or a reduction to make the buyer's offer more competitive.  There is also an "other" box that the parties may use to agree on different compensation terms.

Letting brokerage websites publish the commission that a homeowner is offering the buyer’s agent will show everyone all the incentives at work in a home sale and make it easy for agents to explain the costs of our services.

And being explicit that a listing can offer buyers’ agents any commission or now even no commission will assure consumers and agents alike that the real estate market is wide open for competition.

Therefore, the public will be able to see in advance what percentage of commission is being paid on any home.

This new legislation also effectively separates the processes of buyer and seller agent commissions, and that is going to have significant changes as well.

Beginning January 1^st, the seller and buyer both have control over what they’re going to pay. For the first time ever, a client can turn to their agent and say, ‘Please filter the listings. Don’t show me any homes where the seller is not offering to pay our agreed upon compensation rate.’” And a conversation like that only happens when you demonstrate your value as I described above.

It’s not lost on any agents that this change in Washington law comes in the wake of industry-shifting lawsuits over inflated buyer commissions.

Protecting consumers.

While some awkward situations are sure to come up as agents adjust, the difficult conversations prompted by the new legislation will help their buyers through a much more transparent transaction. Another plus: Under the revised law, brokers won’t have to wrestle with clients who don’t want to sign agreements, for example, because another agent at another brokerage didn’t ask them to.