REMINDER: Buyer Representation Compensation

How Buyer’s Agents Get Paid — And What Happens If the Seller Pays More

In today’s real estate transactions, a buyer’s agent is typically paid through a Buyer Representation Agreement with the buyer. This agreement clearly states the compensation the buyer’s agent expects to receive for representing the buyer in the purchase of a property.

Here’s how it works:

• The buyer and their agent agree on a compensation amount (for example, a percentage of the purchase price or a flat fee) in the buyer representation agreement.

• The seller may choose to offer compensation to the buyer’s agent prior to or during negotiations.

• If the seller offers compensation, that amount is applied toward what the buyer agreed to pay their agent.

If the seller’s offered compensation is less than the agreed amount, the buyer may be responsible for paying the difference at closing, depending on the terms of the agreement.

If the seller offers more than the amount the buyer agreed to pay, the buyer’s agent cannot simply collect the extra money. In most agreements and under current practice standards, the agent is typically limited to the amount agreed to in the buyer representation agreement. 

The key takeaway is that the buyer representation agreement sets the maximum compensation the buyer’s agent can receive, ensuring transparency about how agents are paid and who is responsible for that payment.  If you put 0 or N/A on your agreement YOU MAY NOT COLLECT FROM THE SELLER!