2024 Home Buyer Checklist

[@jenniferhodgson7640]

What are your thoughts on Buyers responsible for paying for the Buyer Agent Representative if the Listing Broker isn't offering compensation?

[@asknavarro]

Great question and it's so important that buyers understand how their agents are compensated. This is a very long answer so I tried to break it in to a few parts: 1. Using a buyer's agent was never free; because they were rarely even paid out of pocket, buyers always just assumed (or were falsely told) their buyer agent was free - but do you know anyone that works for free? No way, that's crazy. In reality though, the buyer is paying for everything in the transaction - they're the ones assigning value to the property with an offer price and forking over the cash to pay for it. So while you may not have paid your buyer's agent in the past directly, it was still factored in to the sale price and paid out through the transaction at closing. The beauty of that way of doing things was that a buyer could easily finance that cost as part of the sale, especially since many buyers can't afford the extra cost out of pocket in cash at closing. 2. Sellers were never required to pay a buyer's agent's commission. It was and is certainly what agents recommend you do in order to attract more buyers; for the very reason I said in #1, so they can finance the cost of their agent, rather than pay it out of pocket. 3. Even if the listing brokerage doesn't offer buyer agent compensation, the buyer can put language in their offer to have the seller pay their buyer agent's commission as part of the transaction, allowing them to finance it instead of paying out of pocket. 4. Who pays for the commissions and where the money comes from is also kinda of a semantics juggling act. At the end of the day, if you want to hire an expert buyer's agent you can't expect them to work for free, right? Having a pro on your side when making the largest purchase your life is valuable and you can decide what and who you're willing to pay for that. A good agent will outline how they are paid before you even go see your first property, so you know what to expect and how to deal with any listings in which the seller has not already built in compensation for a buyer's agent. To be frank, buyer agents should dictate what they're willing to work for and come to an agreement with they client (the buyer) - it has nothing to do with the seller and what they're willing to offer. After all, a buyer's agent works for the buyer, why should the seller or listing agent get to decide what they make - they don't work for them! I hope this helped 😊

[@jenniferhodgson7640]

@@asknavarro it’s just hard to have that conversation with buyers who already have enough challenges in today’s market and the bidding wars and high demand and low inventory. What’s stopping them from going straight to a listing agent to avoid having to pay for a buyer’s agent?

[@asknavarro]

Educating buyers and demonstrating the value of having an expert on their side has always been a vital part of the conversation. As service providers we have to demonstrate our value in order to justify our fees, that hasn't changed. I think it's just that it's been easy to skip over that part in the past, might not be as easy in the future.

[@jenniferhodgson7640]

@@asknavarro I feel this will hurt a certain section of buyers. It’s going to be interesting when working with VA or FHA buyers who already face limited funds to purchase a home. I wonder if we’ll need to revisit Fair Housing laws to ensure everyone has an equal opportunity to purchase a home with the support of representation.

[@asknavarro]

@jenniferhodgson7640 an agent can help their buyer write their compensation in to the offer without making it less competitive. The financing situation is then still same.