Updates to the Buyer Broker Agreement Requirement (Starting August 2024)
As of August 2024, all homebuyers must sign a Buyer Broker Agreement (formally called the Buyer Representation and Broker Commission Agreement – BRBC) to establish an agency relationship and outline commission obligations. Here’s what you should know:
What’s New?
The way buyers view homes and submit offers is changing. While Buyer Broker Agreements have always existed, they are now mandatory. This means:
- To tour a home, you must sign an agreement with an agent or broker, formalizing your working relationship.
- Agents earn commissions, which were traditionally paid by the seller. Previously, the seller determined and advertised the buyer’s agent’s commission in the MLS at the time of listing.
- Moving forward, sellers will only set and advertise the listing agent’s commission. Buyer agent commissions will no longer appear in the MLS and will instead be negotiated between the buyer and their agent through the BRBC.
Negotiating the Buyer’s Agent Commission
Historically, the seller covered the buyer’s agent commission. Now, buyers submitting offers can request a credit from the seller to cover their agent’s commission. This is a negotiable term, much like price, contingencies, or closing timelines, and can be accepted, countered, or declined by the seller.
Note: The MLS will no longer display the commission amount offered for buyer agents.
Key Details About the BRBC
Here are the main points to know about the Buyer Broker Agreement:
- Duration: The agreement typically lasts for three months, with an option to renew in three-month increments.
- Compensation: It will outline a percentage or flat fee the buyer agrees to pay their agent upon purchasing a home.
- Coverage: The agreement applies to the counties where you’re searching for homes, including nearby areas.
- Exclusivity: The recommended agreement is exclusive, meaning you’ll work solely with your chosen agent.
- Flexibility: Terms within the agreement can be adjusted and modified if needed.
Alternatives to Signing a BRBC
If you prefer not to sign a full Buyer Broker Agreement, here are your options:
- Unrepresented Buyer: You can proceed without representation, but this means you won’t have an advocate or advisor guiding you through the transaction.
- Non-Exclusive Agreement: These agreements allow you to work with multiple agents but require careful attention to avoid overlapping commission obligations.
- Short-Term Agreement: This type allows you to work with an agent for specific properties (e.g., up to three homes) without a broader commitment.
- Open House Form: Allows you to attend open houses without creating an official relationship with the hosting agent.
Understanding these changes will help you navigate the new real estate landscape with confidence. Ensure you fully review the terms of any agreement and discuss them with your agent before proceeding.
*** Additional Links and Information ***
Beginning August 17, 2024, ALL homebuyers, no matter what agent or company you choose must sign a BRBC with a real estate agent BEFORE viewing any homes. While it’s possible to sign a one-time agreement for a single showing, it’s wiser to select an agent early and establish a trusting relationship. This allows the agent to fully understand your needs and provide expert guidance throughout the process, ensuring you receive the best advice and representation. So, don’t just focus on finding the ideal home—take the time to find the right agent as well! We’ve included a few additional important links to the new changes, requirements and information:
