With more brokerages and agents considering a shift away from the traditional cooperative compensation model, many are facing difficult questions. One of the most challenging is what to do if a seller is unwilling to contribute to the buyer broker’s fees, or not willing to pay at all?
Anthony Lamacchia, broker-owner of Lamacchia Realty, has experienced disputes over buyer broker fees for years. He emphasizes the importance of having a signed buyer representation agreement, especially since it will soon be mandated by the National Association of Realtors’ nationwide commission lawsuit settlement agreement.
“Negotiating fees should be done before the sale is finalized,” Lamacchia explains. “Buyers don’t want surprises, so it’s crucial to discuss compensation when making an offer and again when the contract is finalized.”
While some agents may be hesitant to discuss compensation with clients, industry leaders like Sharran Srivatsaa of The Real Brokerage stress that negotiation is a standard part of the process. Whether it’s adjusting the purchase price or negotiating with the seller, finding a solution is key to avoiding surprises for buyers.
Buyer representation agreements outline the services provided by an agent and the compensation agreed upon. However, agents may encounter situations where the agreed-upon fee is not met by the seller. Real estate attorney Chuck Cain suggests that agents may need to be flexible in these situations to avoid potential conflicts with clients.
As industry analyst Rob Hahn points out, disputes between buyers and agents are inevitable. Over time, incompetent agents may find themselves facing reduced compensation as skilled agents provide more value to clients. While conflicts may arise, CEO James Dwiggins of NextHome believes that buyers should only purchase homes they can afford to pay their agent for, ensuring a smoother transaction process.