Buyers Agent Compensation (B.A.C)

As of late July 2024, Buyer’s Agent Compensation (BAC) has undergone a significant shift. Previously determined by the listing agent in collaboration with the seller, BAC must now be negotiated directly with prospective buyers on a case-by-case basis.

Additionally, buyers are now required to have a representation agreement with an agent before viewing a property. These updates, stemming from the landmark National Association of Realtors (NAR) settlement case, are now in effect. The full details can be found on the NAR site.

Scroll below to discover more about these changes and how they can benefit you.

Compensations to Buyers Agents

BAC is completely negotiable but is now between a buyer and buyer’s agent individually on a case-by-case basis. This can either be a percentage of the purchase price or a flat fee, payable at the close of escrow.

Property Showings: Representation Agreement Now Required

Prior to the NAR settlement, property showings were often conducted without a Buyer Broker agreement in place. According to NAR, in 2022 only 35% of realtors used the agreement. With the new rules, buyers wanting to see property for sale will be required to have a representation agreement in place.

There are two potential California Association of Realtors (CAR) forms that can be used for representation:

Buyer Representation and Broker Compensation Agreement (BRBC)
Property Showing and Representation Agreement (PSRA).

Either form will include:

Representation Period – How long the agreement is valid for (max: 30 days)
Amount of Compensation – Completely negotiable: %, flat rate, etc.
Cancellation Rights and Notice

You can view both documents at the bottom of our blog here.

Frequently Asked Questions

Can Sellers Still Compensate Buyers Agents?

Sellers can still offer compensation to buyers agents, and we strongly encourage our sellers to account for compensation to a buyers agent as it facilitates many aspects of the buying and selling process.

In the event that a seller is NOT offering compensation to a buyer’s agent, the request can be made as part of a written offer to purchase the property for the seller to pay the buyer’s agent fee, however the seller could refuse, which would leave the responsibility with the buyer.

How can buyers tell which sellers are offering compensation?

Buyer’s agents previously relied on information from the Multiple Listing Service (MLS) to determine how much compensation was being offered by a seller. As part of the NAR settlement, BAC information is limited to whether or not a seller is offering compensation, but not how much. A Buyers Agent would need to contact the Listing Agent to get additional details.

Can a buyer still work with the listing agent?

Buyers can still work with the listing agent, however a representation and compensation agreement would still need to be agreed to and in place.

Have another question? Message us below!

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As a top rated Real Estate Team, Karen Anderson and The Prestige Team close 60+ homes per year, so we get a first-hand feel for what the market is doing.

Educating the buyer and/or agent to the current market is one of the most important things you can do to improve your buying experience and chances of getting your offer accepted.

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