If you are wanting to purchase a home, it’s important to consider hiring a Real Estate Agent to represent you and your interests during the transaction. But, before you do, you should understand how your Agent will get paid for their services. During a new buyer consultation, your Agent should walk you through the services they provide and the fee they charge for those services to represent you. After agreeing on that fee and before touring homes, the Agent is legally obligated to have you sign what is called a Buyer Broker Agreement (BBA) which is a representation agreement specifying their fees. This agreement obligates you, their client, to compensate them for their services. However, it is possible that a Seller may be offering to pay some or all of your Agent’s fees through a “Buyer Agent Compensation Agreement” at close of escrow. Here are four possible compensation scenarios to understand. How do Buyer Agents get Paid?
OPTION 1 Buyer Pays Fees
OPTION 2 Buyer & Seller Pays Fees
OPTION 3 Seller Pays Fees
Seller is NOT offering a Buyer Agent Compensation. Buyer pays 100% of their Agent’s fees.
Seller IS offering a Buyer Agent Compensation, but it is LESS than the fee agreed upon in the BBA. Seller pays the Buyer Agent the offered Buyer Agent Compensation, Buyer pays their Agent the difference.
Seller IS offering a Buyer Agent Compensation EQUAL to the fee agreed upon in the BBA. Seller pays 100% of the Buyer Agent’s fees
Buyers can now use an addendum to the purchase contract to request the Seller pay a Buyer Agent Compensation equal to the fees they agreed to pay in the BBA. If Seller does not agree to pay, then Buyer is still obligated to pay their Agent the fee agreed upon in the BBA if they move forward with the sale.
OPTION 4 Buyer Negotiates Fees Seller Pays Fees
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