A year later: how real estate agents are getting paid

It’s been almost a year since the big “change” in real estate world. In case you missed it, offers of compensation for buyer’s agents are no longer listed on the Multiple Listing Service. Here’s what we have been seeing and doing over the past year. 

1. While offers of compensation are no longer explicitly listed, most buyers find it beneficial to wrap their agent’s fee into the offer they make on a property. If they are getting a mortgage to purchase the home (as most buyers do) it’s generally easier for them to wrap fees into the mortgage as opposed to coming up with additional cash at the closing to pay the commission. We advise our buyer clients to think about the home’s value in terms of total expense - price of house and real estate commissions - basically what will they will be paying all in to purchase the property.

2. When we represent sellers we advise them to consider all offers and all the terms in the offers to determine what the best option is. While they do not have to accept an offer with the buyer’s agent fee included, it often makes sense for them to do so. Not accepting offers that include an offer of cooperation will limit the pool of possible buyers (see above). Bottom line, what matters most to the seller is what they net at the closing, after all fees have been paid.

A year ago it seemed like there would be a sea change in the real estate industry and it turns out that largely it’s been business as usual, albeit with more transparency. Buyers more clearly understand now that they pay to be represented by a real estate professional and sellers understand that while they do not have to pay the buyer agent’s fee, if it’s wrapped into an acceptable offer to purchase their home, it’s generally most advantageous that they do pay it out of the proceeds at the closing.

Photo credit: iStock.com/standret