A Realtor’s Guide to Navigating Buyer Agent Agreements and Compensation

Navigating Buyer Agent Agreements and Compensation


As the real estate landscape evolves, the recent NAR settlement has introduced new dynamics in how buyer's agents are compensated. This presentation aims to educate buyer's agents on innovative strategies to cover these costs effectively. By understanding these options, agents can help buyers make informed decisions and can better assist their clients in navigating these changes. These five creative compensation structures will help you adapt to the new norms and ensure a smooth home-buying process. Don't be fearful - we've got your back and will help you work through this. If you need to schedule time to walk through this one on one, schedule a call here: https://calendly.com/pinkymortgage/15min 



1. Seller Compensates Both Agents (Same as prior to NAR Settlement)

  • Description: The seller agrees to compensate the listing agent and the buyer's agent individually
  • Key Point: This compensation structure must be disclosed to both parties. Unlike previous practices, it clarifies that the seller is paying both agents directly.


2. Buyer Increases Purchase Price to Cover Buyer's Agent Compensation (Built into Purchase Price)

  • Description: The buyer increases the offer price and requests that the seller pay this increased amount as the buyer agent's commission.
  • Mechanism: The increased purchase price covers the buyer's agent's commission, effectively transferring the cost to the seller through the transaction


3. Buyer Reduces Down Payment to Pay Buyer's Agent Compensation (Finance into Mortgage Loan)

  • Description: The buyer offers the same purchase price but reduces their down payment by using these funds to pay the buyer's agent commission.
  • Financing Adjustment: The buyer adjusts their financing to allocate funds for the agent's commission from their down payment.


4. Buyer Pays Buyer's Agent Compensation in Cash at Closing 

  • Description: The buyer agent negotiates the best purchase price and pays their agent's commission in additional funds to close.
  • Buyer's Action: The buyer directly compensates the buyer's agent without increasing the transaction amount.


5. Seller Pays for Partial Buyer Agent Compensation (Blended Option)

  • This is an option for sellers; If we run into this, we will use one of the financing options above to navigate the situation.
  • Description: The seller pays the listing agent's full compensation and only a portion of the buyers agents agreed upon compensation.
  • Buyer's Responsibility: The buyer signs a Buyer Broker Agreement agreeing to a total commission for their agent. The buyer covers the remaining difference using either options 2, 3 or 4 for the portion that is buyer’s responsibility.


Implementation Considerations

  • Transparency: Ensure all parties know and agree to the compensation structure.
  • Documentation: Clearly outline the agreed compensation method in the Buyer Broker Agreement and other transaction documents.
  • Compliance: Adhere to the new NAR rules and local real estate regulations.
  • Education: Inform clients about these options to help them make informed decisions and understand their financial commitments.


Buyers' agents can navigate the new NAR settlement rules effectively by integrating these compensation methods while maintaining transaction integrity and client satisfaction. Remember, we can help you work through this. If you need to schedule time to walk through this one on one, schedule a call here. Please be patient as slots are filling up fast. https://calendly.com/pinkymortgage/15min 


Your Partner in Success,

Pinky Shah, Certified Mortgage Planning Specialist & Certified Mortgage Advisor





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