The National Association of Realtors implemented new real estate agent commission structure rules. A seller will no longer pay a fixed commission that would be divided between buyer and seller agents when a house is sold. All commissions for both agents are negotiated. Now, a home seller can negotiate how much to pay the buyer’s agent separately from their own listing agent commission.
What does this mean to you as a new home buyer? Here are five main impacts that you need to know.
Buyers are required to sign a binding representation agreement before viewing any homes with their realtor—a simple handshake and a promise no longer suffice.
The buyer’s agency agreement must specify how the buyer's agent will be paid, which must be included in any purchase offer you submit. Please note that the home buyer may be responsible for some or all of the commission if a seller does not agree to pay the full amount agreed upon in the buyer’s representation agreement.
The buyer’s representation agreement must include a term length. The average length of these contracts is 3-6 months.
A buyer’s agent can bring tremendous value when buying a home. In addition to having access to MLS, they will represent your interests, negotiate with sellers, properly assess properties, and attend home inspections. It is the buyer’s agent’s fiduciary duty to protect and represent your interests.
In today’s competitive Colorado real estate market, it is not recommended to try to reduce commissions for either the buyer's or seller's agents. Doing so will most likely cost you more money in the long run, as it will increase the potential days on the market and inhibit potential home price reductions.
If you have questions about selling or buying a home, contact Chadwick with Denver Real Estate Professionals. He is an experienced REALTOR® and a Life-Dream Advocate ready to discuss your future.
Chadwick V. R. Williams, SRES, CRS, GRI, SRS, Luxury Certified
REALTOR® - Life Goal Advocate
720-666-9805
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