Sign a buyer's agreement before even being shown a house?

[MemoriesByTheMile]

This all changed after the NAR legal settlement last year.
In the USA, unlike most countries, we have historically had both buyer agent and seller agent and they were BOTH paid for by the seller. In many other countries, if a buyer wants an agent, they hire and pay their own agent.
With the settlement last year, the NAR (National Association of Realtors) agreed to change some things to no longer force the seller into paying both buyer and seller agents (among other things). As a result, now if you want to see a house with an agent, you have to sign paperwork that you warrant that the agent will be paid x% and if the seller won’t pay it, then you as the buyer will.
I like the change. We have sold and bought houses without realtors and like having the option clearly laid out now. But it is a change that everyone needs to learn and get used to.
Every realtor will have you sign this paperwork now before they show a house. But you can also try to see the house without a realtor.

 

[redbaron]

The NAR agreement is a good thing for those that understand. It’s a bad thing for the common person making in frequent purchases.

As a real estate investor, I am very happy with the NAR. I have a team of agents around the country that I work with and we have an understanding that they will end up with 2% in their pocket when the deal closes.

Often the 2% comes from the seller at closing, but in the end I am paying, as it always has been.

Prior the the NAR, I still had the same arrangement. Often the sellers agent was making 2%, their broker 1%, and my broker/agent making 2%.

The deal we closed last week was a 1% to selling broker/agent and 2% to my broker/agent.

If your not dealing directly with the broker then there are more commissions to be paid out.

When buying a home as a one off, the best thing you can do is sign a limited agreement for that one property the agent shows you and for a term no longer than 3 months. Agreeing to 3% is the norm, and unless your buying a high value ($4M+) or frequent transactions, it will be difficult to get less than 2%.

I personally prefer to pay my broker 2% for the value they bring, but as I said, this is a business for me so I look at it very differently than a one off purchaser would.

 

[MemoriesByTheMile]

The NAR agreement is a good thing for those that understand. It’s a bad thing for the common person making in frequent purchases.

As a real estate investor, I am very happy with the NAR. I have a team of agents around the country that I work with and we have an understanding that they will end up with 2% in their pocket when the deal closes.

Often the 2% comes from the seller at closing, but in the end I am paying, as it always has been.

Prior the the NAR, I still had the same arrangement. Often the sellers agent was making 2%, their broker 1%, and my broker/agent making 2%.

The deal we closed last week was a 1% to selling broker/agent and 2% to my broker/agent.

If your not dealing directly with the broker then there are more commissions to be paid out.

When buying a home as a one off, the best thing you can do is sign a limited agreement for that one property the agent shows you and for a term no longer than 3 months. Agreeing to 3% is the norm, and unless your buying a high value ($4M+) or frequent transactions, it will be difficult to get less than 2%.

I personally prefer to pay my broker 2% for the value they bring, but as I said, this is a business for me so I look at it very differently than a one off purchaser would.

Another option for a buyer is to not use a realtor (in some jurisdictions) and use a real estate attorney to assist with the legal paperwork.
Last house we purchased (prior to this NAR settlement) we did not have an agent and we tried to negotiate to get the buyer’s agent % given to us as a discount on the price. But the agreement that the seller signed to list the house said the seller would pay 6% (the exorbitant norm in this area) and IF there wa a buyers agent/broker then they would split it with them.
So because we didn’t have an agent, the seller paid a full 6% to their broker/agent.
We (buyers) got a thank you note from that sellers agent after we made the purchase.

Very happy with this NAR settlement and the change, as the market adjusts and learns how this should work now this will result in lower closing costs to the seller.