Buyer's Agency
Whether it's new to your, or you already heard, there's a construct called Buyer's Agency in real estate. What is that? Well, Buyer's Agency is an agreement between a buyer and their agent about their relationship. There are several ways to set up a Buyers Agency Agreement, otherwise known as a BBA, and all in all, a BBA can be as flexible or as tight as you and your agent see fit.
How Buyer's Agency Works
We represent buyers and sellers in the State of Florida as well as in North Carolina. Both states have similar rules surrounding BBAs. Historically, there was a mistaken understanding that it was the obligation of a seller to pay a buyer's broker, the buyer's agent. Lawsuits came about, and long story short, now, as a buyer, you need some form of agreement with a buyer's agent prior to touring any home or property. What does that mean? On a very high level, it means that the agent needs to disclose certain information to you about their role, how they get paid (not that you need to pay them necessarily) and by signing, which you must do in order for a home tour to happen, that you acknowledge that the agent has disclosed those pieces of information to you.
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These agreements can be for one tour of a single property, they can be for a span of time, this way you don't have to keep signing one for each and every home you want to see, or can even establish a true agency agreement where you, as a buyer, understand that to work consistently with that specific agent on the purchase of your next property that it's possible that you will need to compensate the agent's broker, who in turn pays the agent. The agreement stipulates how much you would compensate the agent's broker, when that compensation would take place and under what conditions (ex. the closing on the purchase of your next property.)
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That said, we have simplified BBAs quite a bit here, but the nuts and bolts is that compensating a buyer's agent, or rather buyer's broker, was never the obligation of the seller, and these agreements are now required so there is a clear understanding of how real estate agents will be compensated when we represent buyer clients. It became (mis)understood for a period of time that sellers were paying buyer's brokers, but compensation has always been negotiable on both sides of a transaction. At the end of the day, if an agent is working on your behalf, opening doors, negotiating and providing a real estate service to you, they deserve to be compensated for that service...by you. The seller is not obligated to pay your agent for you, although you certainly could negotiate for that when it comes time.
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Confused? Ask us. Call 646-699-3876 or email Melissa directly at melissa@venderealestate.com.
