NAR Consumers: Negotiating Written Buyer Agreements

So, you’ve decided it’s time to buy a home and want to work with an agent to guide you through the process – excellent choice. The next step is to interview agents and negotiate a written agreement that includes the services the agent will provide and the compensation they will receive. Here’s what you need to know about negotiating an agreement with an agent who is a REALTOR®.   When will I be able to negotiate? Written buyer agreements are required for many real estate professionals before you tour a home with them, either in-person or a live virtual tour. These agreements help ensure both you and your agent are clear about roles, responsibilities, and agent compensation. If you are simply visiting an open house on your own or asking a real estate professional about their services, you do not need to sign a written buyer agreement.   What can I negotiate? Agreements with your agent are negotiable, including terms about the services your agent will provide, how much your agent will be paid, how long your agreement will last, and more. You and your agent will work together to reach an acceptable agreement that allows you to get the value and services you need in the homebuying process, while also enabling your agent to pursue fair compensation for their work. Remember, compensation is fully negotiable and not set by law. You should consult a real estate attorney if you have any questions or concerns regarding a buyer agreement.   How is my agent compensated? Agent compensation can take many forms, such as a flat fee, a percentage of the purchase price, or an hourly fee. Agents cannot agree to an open-ended amount or range of compensation such as “the agent’s compensation will be whatever amount the seller is offering” or "between X and Y percent." You can also ask the seller to offer compensation to your agent, which can be sought after in the purchase contract via the seller compensation addendum.   What types of services can my agent provide? Agents may offer many types of services such as finding and showing you homes that meet your criteria, accompanying you to showings, sharing their analysis of available properties, negotiating on your behalf, and more.   How do I start the conversation? You may want to talk to a few agents to find the best match to help you on your homebuying journey. Start by asking questions about the options available to you. If you are working with a REALTOR®, they are bound by a Code of Ethics to have open and transparent conversations with you about your options.   What if we can’t agree? You don’t have to sign an agreement that you don’t agree with, and you or the agent can walk away from a negotiation at any time. Keep looking for the right fit – another agent may be able to better meet your needs.   Can we change the terms of the agreement after we make it? Yes. You and your agent can mutually agree to change the terms of your agreement. But your agreement and/or state law may govern when it can be changed or terminated. Read your agreement closely and speak with your agent if you would like to change or exit your agreement.   ✅ Please visit facts.realtor for more information and resources, and consult your real estate professional or attorney for details about state law where you are purchasing a home.   📣 REALTORS® are members of the National Association of REALTORS®   📚 Welcome to the Future of Residential Real Estate (Commissions Decoupled)📚 Then and Now: Decoupled Commission and New Flow of Compensation🔎 View the ‘Buyer-Broker Exclusive Employment Agreement’ example.🔎 View the ‘Buyer-Broker Agreement to Show Property’ example.🔎 View the ‘Residential Listing Contract - Exclusive Right to Sell’ example.🔎 View the ‘Seller Compensation Addendum’ example.📚 Homebuyers: Here's What the NAR Settlement Means for You📚 Home Sellers: Here's What the NAR Settlement Means for You   📆 Schedule time with me to address any questions and concerns about buying, selling, and renting residential real estate in the Valley of the Sun (Metro Phoenix). 🏠 We'll get you where you need to go! 🚀   ☎️ Mobile 602-517-4463📧 Mail@JasonPetersonRealtor.com🌐 JasonPetersonRealtor.com  

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NAR Consumers: What Veterans Need to Know About Buying a Home

The National Association of REALTORS® is proud to support those who serve our country on their journey to achieve the American Dream of homeownership. Veterans and active service members often have unique needs when looking for a home, and agents who are REALTORS® are committed to helping ensure those needs continue to be met following the real estate practice changes that went into effect on August 17, 2024 (1st of August in Metro Phoenix).   I’d like to take advantage of my Department of Veteran Affairs (VA) Home Loan benefit. Am I allowed to pay for a real estate agent under VA rules? Yes. On August 10, 2024, the VA enacted a temporary policy allowing buyers with VA home loans to pay for real estate professional representation. NAR advocated extensively for this outcome to give veterans greater access to professional representation in their pursuit of homeownership. NAR’s efforts include meeting directly with VA officials, engaging lawmakers, and gathering support from our industry partners, as well as submitting a letter urging the department to lift the ban.   Why is the policy only temporary? Will it be made permanent? The VA will decide if formal rulemaking is necessary to make this policy permanent. NAR is advocating for this policy to become permanent through continued engagement with lawmakers and the VA, sharing examples of how this policy change is helping consumers.   Why am I being asked to sign a written agreement? Written buyer agreements lay out the services your real estate professional will provide and what they will be paid for those services. The practice changes require written agreements for many real estate professionals nationwide. You are in the driver's seat with these agreements, which are fully negotiable. You should not sign anything that includes terms you do not agree with or do not understand.   How does my buyer’s agent get paid? This is determined in your written buyer agreement. Methods of paying a buyer’s agent may include the seller offering to compensate the buyer’s agent, or the buyer requesting seller concessions to the buyer to help offset their obligation to their buyer’s agent and/or other closing costs, or the buyer paying their agent directly out of pocket.   What has NAR done to promote access to financing for veterans? NAR has been a strong supporter of the VA Home Loan Guaranty program, which has helped American veterans obtain more than 24 million home loans. NAR continues to advocate for the VA to offer flexible and competitive loan products. For example, some veterans are still losing out due to VA’s strict appraisal requirements for properties they insure. NAR continues to work with the VA and Congress to ensure that the descendants of certain veterans may use an unused home loan benefit. NAR advocates for allowing a veteran to sell their home to a buyer who can assume their existing interest rate.   Why should veterans and active service members work with an agent who is a REALTOR®? REALTORS® are obligated under NAR’s Code of Ethics to work in your best interest. Additionally, many REALTORS® have obtained NAR’s Military Relocation Professional (MRP) certification to better prepare them to work with veteran buyers.   ✅ Please visit facts.realtor for more information and resources, and consult your real estate professional or attorney for details about state law where you are purchasing a home.   📣 REALTORS® are members of the National Association of REALTORS®   📚 Welcome to the Future of Residential Real Estate (Commissions Decoupled)📚 Then and Now: Decoupled Commission and New Flow of Compensation🔎 View the ‘Buyer-Broker Exclusive Employment Agreement’ example.🔎 View the ‘Buyer-Broker Agreement to Show Property’ example.🔎 View the ‘Residential Listing Contract - Exclusive Right to Sell’ example.🔎 View the ‘Seller Compensation Addendum’ example.📚 Homebuyers: Here's What the NAR Settlement Means for You📚 Home Sellers: Here's What the NAR Settlement Means for You   📆 Schedule time with me to address any questions and concerns about buying, selling, and renting residential real estate in the Valley of the Sun (Metro Phoenix). 🏠 We'll get you where you need to go! 🚀   ☎️ Mobile 602-517-4463📧 Mail@JasonPetersonRealtor.com🌐 JasonPetersonRealtor.com  

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NAR Consumers: Seller Offers of Broker Compensation

As a home seller, you have a wide range of choices when deciding how to market your property. This includes whether you’d like to offer – or authorize your agent to offer – compensation to a buyer’s agent as a way to attract potential buyers. Here’s what you need to know as you consider your options related to offering compensation.   What is an offer of compensation and why make one? An offer of compensation is when you – the seller – compensate another agent for bringing a buyer to successfully close the transaction. Offers of broker compensation help reduce out-of-pocket costs for prospective buyers, which in turn may bring more potential buyers for the transaction. These costs can be especially significant for first-time buyers, lower- to middle-income buyers, or those from underserved communities.   Are offers of compensation mandatory? No. It is up to you to determine if making an offer of compensation is the best approach for selling your property. Agents who are REALTORS® are here to help answer your questions and guide you to make a decision that works for you.   As a seller, does my agent need my permission to offer compensation to a buyer’s agent? Yes. Your listing agent can only communicate your willingness to offer broker compensation to a buyer’s agent if they have your written approval and signoff on the amount.   What types of compensation can I offer? There are a couple options available to you as a seller to discuss with your listing agent. Both could include a flat fee paid directly to the buyer’s agent or a percentage of the purchase price. Beyond broker compensation, you could also consider offering a buyer certain concessions, such as covering closing costs, to make the total home purchase more affordable for them.   How will a buyer’s agent know if there is an offer of compensation? Offers of broker compensation can be advertised in many ways. If you approve an offer of broker compensation, it can be shared through common marketing methods such as flyers, signs, brokerage websites, social media posts, or simply through a phone call or email. Offers of broker compensation cannot be listed on any Multiple Listing Service system anywhere in the country.   Do I have to advertise an offer of compensation if I decide to make one? No, it’s up to you to decide. Advertising broker compensation can help get the word out to bring more buyers to the table, but you can also choose not to advertise and instead negotiate the offer in a purchase agreement.   You mention concessions – what does that mean? A seller concession is different than an offer of broker compensation. It’s when a seller covers certain costs associated with purchasing a home for the buyer. Concessions can make home ownership more accessible for buyers by reducing upfront expenses. These can cover things like some transaction costs, a home warranty, or property repairs.   As a seller, how do I know what compensation option is best for me? When you work with an agent who is a REALTOR®, you are working with a professional guided by ethical duties under the REALTOR® Code of Ethics, including the pledge to protect and promote the interests of their clients. Your listing agent will work with you to weigh your options, answer questions, and develop a strategy you are confident in.   ✅ Please visit facts.realtor for more information and resources, and consult your real estate professional or attorney for details about state law where you are purchasing a home.   📣 REALTORS® are members of the National Association of REALTORS®   📚 Welcome to the Future of Residential Real Estate (Commissions Decoupled)📚 Then and Now: Decoupled Commission and New Flow of Compensation🔎 View the ‘Buyer-Broker Exclusive Employment Agreement’ example.🔎 View the ‘Buyer-Broker Agreement to Show Property’ example.🔎 View the ‘Residential Listing Contract - Exclusive Right to Sell’ example.🔎 View the ‘Seller Compensation Addendum’ example.📚 Homebuyers: Here's What the NAR Settlement Means for You📚 Home Sellers: Here's What the NAR Settlement Means for You   📆 Schedule time with me to address any questions and concerns about buying, selling, and renting residential real estate in the Valley of the Sun (Metro Phoenix). 🏠 We'll get you where you need to go! 🚀   ☎️ Mobile 602-517-4463📧 Mail@JasonPetersonRealtor.com🌐 JasonPetersonRealtor.com  

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