NEW CHANGES WITH BUYER BROKER AGREEMENT REQUIREMENT

Starting in August 2024, all buyers will be required to have a signed buyer broker agreement (Buyer Representation and Broker Commission Agreement - BRBC) establishing an agency relationship and creating a commission obligation.

Here's what you need to know:

WHERE TO Start

To start understanding the changes taking place and new normal of how buyers agents will be paid, watch the video above of Kendra Bishop explaining the highlights.

WHAT'S CHANGED?

In essence, the process of viewing homes as a buyer and the presenting offers has changed. While we have always had buyer broker agreements, they were not required, but going forward they will be. In order to view a home, you must be in an agreement with an agent/broker to work together, with a signed buyer broker agreement. We, as agents, are paid on commission and that commission has historically been paid by the seller. Almost always the commission is a percentage of the sales price and that percentage was determined by the seller at the time of listing and advertised in MLS. Now the seller is only agreeing to a listing agent commission at time of the listing and buyer's agent commissions will no long be advertised in MLS. The buyer's agent commission is now an agreement between the buyer and the buyer's broker/agent as part of their buyer representation agreement.

THEN VS. NOW

How Buyer's Agent Commission is Paid:

BUYER'S AGENT COMMISSION IS A NEGOTIATION ITEM

In the past, it was always taken for granted that the seller will pay the buyer's agent commission. Now, when buyers submit an offer (the BRBC will be included with the offer), they have the option to request a credit from the seller that can be used to pay their agent's commission. Like any other item in an offer (price, close of escrow, contingencies), this can be countered, accepted, or rejected.


It will also no longer be listed in MLS what the seller is offering to pay buyer's agents.

WHAT TO KNOW ABOUT THE BRBC

The agreement is 5 pages long and there are a lot of intricacies to it, but here are the main things to know:

The buyer broker agreement you'll be signing will be valid for 3 months with the option to extend for 3 month periods after the expiration


The agreement will have a percentage or, less likely, a flat fee that you agree to pay your agent when you buy a home


The agreement will cover the counties your home search is located in plus a few surrounding counties


The agreement we encourage you to sign is an exclusive one that dedicates you to your agent


Elements of the agreement can be amended and modified

ALTERNATIVES TO SIGNING A BRBC

You can choose to not sign a BRBC and purchase a home as an unrepresented buyer. Foregoing representation will have you without an advocate, advisor, and professional on your side of the transaction.


There are also non-exclusive agreements you can sign although make sure you understand what you're signing and with who as you don't want to end up owing commission to multiple parties.


There are also short-term forms that allow you to see up to three properties with an agent and only obligates you to that agent with those properties.


Then there is also an open house form that allows you to view an open house without establishing a relationship with the host agent.

WE KNOW THIS IS A LOT OF INFORMATION

There is a lot of new to get used to. If you have any questions about the process, why a BRBC is required, how commissions get paid, what forms need to be signed, or anything else, please reach out to us!

We have spent hours and hours and hours on trainings, webinars, expert discussions, and printed handouts learning the new changes inside and out. We are a resource to you now more than ever.

Contact us any time

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