What is a Buyer's Agent?
Beginning August 1, 2024, all Realtors in the Metro-East and surrounding areas will be going through a pretty big change in how we do business: we will now have to have a signed Buyer’s Agency Agreement with all potential buyers BEFORE we can show them a house. This same change will be adopted by Realtors nationwide on August 17th, and will be in the Code of Ethics for Real Estate Professionals in Illinois by the beginning of 2025.But what IS a a Buyer’s Agency Agreement and what does it MEAN for you?
Before we answer that, give us a second to explain what “agency” actually is.
No matter which side of the transaction we are working on (Buyer or Seller), an “agency relationship” between a Realtor and a client means several things: we advise and guide you through the process of buying or selling a home, we work in your best interest (not the interest of ourselves or our office), and we keep all of your confidential information to ourselves!
Realtors are paid a pre-determined fee (either a flat fee or percentage of purchase price in most cases) at closing as compensation for all of our work on a transaction. Historically, this fee has been paid by the seller, who prices the property appropriately to offset this cost at closing. But a flurry of recent lawsuits by both buyers and sellers, combined with a proposed settlement by the National Association of Realtors AND involvement from the Department of Justice has led to a call for “decoupling” of the commission.
BUT WHAT DOES THAT MEAN? It’s a fancy way of saying that Sellers will negotiate payment terms with their Agent, and Buyers will do the same with theirs. Sellers will pay their own agent. And Buyers will pay theirs…maybe. More on that later.
Why is this a good thing for you, the Buyer? Because it is clarifying and formalizing a choice you had all along: the choice to PICK YOUR AGENT THAT YOU WANT REPRESENTING YOU. Instead of meeting a random agent at the house that interests you to view it (which WAS creating an agency relationship, you just didn’t know it), you now get a chance to sit down with one or several agents ahead of time and essentially interview them. Find out what they do for their clients. Decide if their personality and negotiating style will fit with yours. And then you get to sign a document saying you will be loyal to them as clients and they will be loyal to you as your Agent.
And yes, compensation/commission will be part of the agreement you sign. You are committing to paying us a professional wage for the hard work that we do on your behalf. BUT that doesn’t mean you will need to come up with thousands of dollars at closing to pay your Agent. You can still ask the seller to pay your Realtor’s commission when making an offer on the property.
Buying a home is probably the biggest one-time financial commitment you will make in your lifetime. You deserve a chance to carefully choose the person who guides you through that process. We are confident that any of the experienced Agents at Bond County Realtors LLC are qualified to help you navigate this era of your life…and we would love to meet with you and tell you why!