Until recently, SELLERS have PRESET the amount of the commission that is paid to the BUYER’S agent. THE BURNETT VS NAR SETTLEMENT HAS CHANGED THE WORLD OF PAYING FOR REAL ESTATE SERVICES TO BUY AND SELL.

Frequently agents would do little to “meaningfully” explain how real estate commissions worked. The buyers were often lead to believe that they had no control over what their agent was paid regardless of the amount of time or skill level of the agent. Sometimes buyers were even told that their services were “free” which was not true. Buyers were not given the option of not hiring an agent, even if they were attorneys and didn’t need help. This should have saved thousands or possibly tens of thousands of dollars in commissions and resulted in a lower sales price. If the buyer elected not to have an agent, the entire commission, offered by the seller, would be paid to the company representing the seller.

Post BURNETT, agents will have to have a written contract with the buyer and disclose what they have to pay, regardless of what the seller may agree to pay. AND, the seller doesn’t have to agree to pay anything toward the commission for the buyer’s agent. Just because a seller may agree to pay 2.5% toward an agent for a buyer, the buyer doesn’t have to agree to pay all of that to their agent. They can, for example, split it and then either lower the sale price or using the difference to pay closing costs. 

FOR EXAMPLE:

If a buyer agrees to a $400,000 sale price and the agent wants 2.5% to help them through the process, that’s $10,000 dollars! Buyers may be given the impression that they need to hire an agent in order to view properties, this is absolutely not true! Buyers should be able to view the property with the agent for the seller without hiring them. The agent for the seller is getting paid by the seller to do that (anything else would defy logic). Even if the agent becomes your tour guide, how much is that really worth? Buyers should be able to offer an hourly rate for services and avoid adding tens of thousands of dollars to the sale price.

MY AGENT IS MY FRIEND

This is one of the big reasons that we see BUYERS and SELLERS overpay for real estate services. If they are really your FRIEND, what discount are you getting? How many tens of thousands of dollars are you paying? Are they charging you the same as a “non-friend”?

Do your self a favor, get the best deal and save thousands. If you really want, you can take some of the savings and pay for their kid’s wedding.