HOME SELLER’S GUIDE TO BUYER BROKER COMPENSATION
The sale of your home is a big decision, emotionally and financially. In addition to thinking about your real estate goals, you may have heard about some changes in the real estate industry.
At Berkshire Hathaway HomeServices Chicago, our mission is to help you Move Confidently, we’d like to talk about what this means for you.
Berkshire Hathaway HomeServices Chicago
The National Association of REALTORS® (NAR) settlement about residential real estate business practices went into effect in August 2024. This includes three things that sellers should understand:
• As always, sellers are not required to offer Buyer Brokerage Compensation. If sellers choose to do so, they determine the amount.
• The MLS can no longer be used to offer compensation to buyer representatives. Those offers can be advertised on the brokerage website and on property marketing materials.
• Sellers may still agree to pay Buyer Broker Compensation. This will be negotiated as part of a purchase offer and written into the sales contract.
YOUR PROPERTY MARKETING PLAN
Whether to proactively offer Buyer Broker Compensation is one of many elements of the overall property marketing strategy that you and your agent will discuss, such as the pricing, listing timeline, staging, photography, broker promotion, the open house schedule, social and digital advertising.
THINKING LIKE A BUYER
Many buyers are concerned with managing closing costs. Under most circumstances, a commission to a buyer’s broker cannot be financed, so buyers would need to have the funds to cover it at closing.
Proactively offering a financial concession, like Buyer Broker Compensation or a closing cost credit, can help your home appeal to a broader group of possible buyers.
OFFERS & CONTRACTS
NEGOTIATING REQUESTS
When making a purchase offer, a potential buyer may request a financial concession even if an offer wasn’t advertised. This is a negotiable item, like the closing date, contingencies and other terms of the purchase contract. Your BHHS Chicago agent will follow your instructions to present offers to you with all relevant information, so you can make the decision that is best for you.
ELEMENTS OF A CONTRACT
All financial terms agreed upon by seller and buyer, including Buyer Broker Compensation or seller concessions must be included in the purchase contract. Your BHHS Chicago agent will assist you in understanding the terms of each offer and each document.
BUYER BROKER COMPENSATION OR SELLER CONCESSION?
Buyer Broker Compensation and seller concession offers are similar: both provide a closing credit from the seller to the buyer. Both are non-binding offers that are fully negotiable and will be memorialized in the contract. But there some key differences you’ll want to understand.
• A general seller concession can be used for a variety of closing expenses, which may include buyer broker compensation.
• A seller concession is NOT a compensation offer to a brokerage, so it can be included in the MLS.
SELLER CONCESSION OFFER TO BUYER
Example:Selleroffers$X,000asaclosing credittobuyer
CAN be advertised in the MLS remarks. Can be used for a variety of buyer’s closing expenses, including Buyer Broker Compensation
REACHING YOUR AUDIENCE
Along with marketing all of the features of your home, BHHS Chicago will advertise Buyer Broker Compensation offers on BHHSChicago. com, if you direct us to do so.
BUYER BROKER COMPENSATION OFFER
Example:SelleroffersX%tothebuyer’sbroker tobepaidatclosing.
CAN NOT be advertised in the MLS remarks. Specifically for broker compensation
LISTING AGENTS & BUYERS
Most buyers will be represented by their own agent, but some may not be. Here are two scenarios that may come up.
UNREPRESENTED BUYERS
If a buyer has declined broker representation, your listing agent may provide additional services to you to facilitate the sale of your property. These could include things like showing the property, providing access to an inspector or even filling in the standard contract for the buyer offer. Your listing agent will represent your best interests at all times and provide a Notice of No Agency to the buyer.
DUAL AGENCY
A buyer represented by your agent may want to purchase your home. If your agent is considering this, they will talk to you about dual agency and what this means for your representation. You will have the choice about how to proceed. Many listing agents choose not to represent a buyer and seller in the same transaction so that they can be fully committed to the interests of their sellers.
