What’s the latest shift in the real estate world for buyers, thanks to the NAR settlement, and why has it got some buyer’s agents concerned?
To start, if you're looking to buy a home, you now must sign a Buyer’s Broker Agreement before a buyer's agent can legally show you any property. This isn’t just a recommendation anymore—it’s a requirement.
This change means buyers, like sellers, now need a formal agreement in place to work with an agent.
Previously, signing a buyer broker agreement was suggested but often overlooked by agents who didn’t want to push clients too early. Without it, the agent was technically representing the seller’s interests. But from now on, if an agent shows you a home without this agreement, they could face legal trouble.
By signing, buyers agree to be responsible for the agent’s fee, which covers showing properties, negotiating, and other services.
At first glance, this might seem daunting for buyers. Sellers typically know that agent fees are deducted from the sale proceeds at closing. Buyers, on the other hand, might worry about having to come up with additional cash on top of their down payment, taxes, insurance, and other closing costs.
And this is the real concern for agents—buyers might be scared off by the potential costs.
But here’s the reality: buyers can still negotiate for the seller to cover their agent’s fees as part of their offer. Most sellers will agree to this because they understand that the fee they agreed to pay their listing agent isn’t the only cost they’ll face—they’ve likely factored this into the home’s price already.
So, buyers, take a deep breath. Unlike many other professionals, your agent isn’t billing you hourly for all the work they do. Their fee is typically paid at closing. If the seller isn’t willing to cover these costs, you can walk away and keep searching for the right deal.
In other words, you’re still in control. If you’re not happy with what the seller’s offering, you don’t have to sign, and you don’t have to pay. Just move on to the next house.
This is similar to the option period when you can back out if the seller doesn’t agree to reasonable repairs. Now, you can also negotiate for them to cover your agent’s fees. It’s all part of the process, and well-prepared sellers will expect it.
To sum it up, both buyers and sellers should know that this is the key change brought about by the NAR settlement.
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