Buyer Broker Compensation Explained.

As of July 1, ALL real estate agents are required to have a Buyer Representation Agreement signed by any buyer prior to showing a property. Similar to a listing brokerage agreement, this agreement sets out the requirements of the agent, but also what is expected of the buyer. For too long, the buyer side of a transaction has sort of existed in the Wild West with buyers working with multiple agents without any contractual obligation for either party, and it simply hasn't been good for the industry. This agreement also sets forth the compensation for the buyer's agent. This requirement is a good thing for the industry and good for the buyer and buyer's agent, so there is nothing to be scared of here. Even though this contract will state the buyer is responsible for the Buyer Agent Compensation, it should be noted that part of the negotiations will be that the buyer agent will negotiate that the Buyer Agent compensation be paid through the settlement of the transaction as a seller expense on the settlement statement but funded by the buyer.