Tips for Talking With Buyers and Sellers

BY NAR LEGAL AFFAIRS

Reprinted from REALTOR^® Magazine by permission of the NATIONAL ASSOCIATION OF REALTORS^®. Copyright © 2024. All rights reserved.

Having a plan to navigate conversations about compensation and answer consumers’ questions provides transparency and is a critical component of the home buying and selling process. Consider these tips from NAR’s Legal Affairs team as a starting point.

On the Buyer Side

DO emphasize your value proposition: what you do, how you do it, and why it’s important to them.

DO highlight the benefits of a written agreement, including that it benefits all parties by solidifying the relationship, duties and compensation. (All REALTOR^® MLS participants who are working with buyers will be required to enter into written agreements with their buyers starting in late July 2024.)

DO explain the compensation terms of a written agreement and the fact that compensation is negotiable.

DO emphasize that you will inform the buyer before showing a property whether there is an offer of cooperative compensation and whether that offer covers the agreed-upon compensation. advise consumers that they have choices about how the buyer broker is compensated, depending on broker-consumer negotiations, including but not limited to fixed-fee commissions paid directly by consumers, concessions from the seller (as long as such concessions are not limited to or conditioned on the retention of or payment to a cooperating broker or other buyer representative), or a portion of the listing broker’s compensation.

DO educate the consumer that offers of cooperative compensation help make professional representation more accessible, decrease costs for home buyers to secure these services, and increase fair housing opportunities.

On the Listing Side

DO advise the consumer of the benefits of cooperation and obtain seller consent regarding any compensation that will be offered to another broker who brings in the buyer.

DO explain the compensation terms of a written agreement and the fact that compensation is negotiable. educate the consumer that offers of compensation can help increase the potential buyer pool for sellers, thereby increasing the likelihood of obtaining the best sales price and terms.

DO inform the consumer about limitations on the ability to finance buyer broker compensation, as well as the current inability of buyers who are veterans to directly compensate their broker.