NAR tells buyers they can — and should — negotiate with agents
A new guide explains the types of compensation allowed (not an “open-ended amount or a range”), how buyers can ask sellers to pay and when it’s OK to walk away.
"Commissions have always been negotiable" has been a common refrain during the lawsuit era of the past year. Not so common? The National Association of Realtors giving buyers detailed advice on how to do it.
But that's exactly what the latest entry in NAR's consumer guide series contains, along with information on the many services agents provide and ways to start the conversation. It also includes a nod to the Realtor code of ethics and agents' commitment to putting client interests ahead of their own.
Timing: The guide specifies that buyers don't need to sign an agreement if all they're doing is visiting an open house or "asking a professional about their services." But they should expect to sign some kind of written agreement before touring a house.
What's negotiable? Most aspects of the buyer-agent relationship can be negotiated, NAR tells buyers. That includes the length and terms of the agreement, expected services, compensation and more. "You and your agent will work together to reach an acceptable agreement that allows you to get the value and services you need in the homebuying process, while also enabling your agent to pursue fair compensation for their work," NAR advises.
"Remember: compensation is fully negotiable and not set by law," the guide adds.
So how should buyers think about compensation? The guide explains, in simple terms, how agents can get paid, including:
A flat fee
An hourly fee
A percentage of the purchase (perhaps the most familiar option to most folks)
It specifies that "agents cannot agree to an open-ended amount or range of compensation" such as "between X and Y percent" or "whatever the seller is offering." But it does say that buyers are allowed to ask sellers to offer compensation to their agent.
Exit strategies come up as well: The guide makes clear to consumers that they don't need to sign any deal they don't want to sign.
"You or the agent can walk away from a negotiation at any time," it states. "Keep looking for the right fit — another agent may be better able to meet your needs."
It also makes clear that signed agreements can be altered, with caveats.
"You and your agent can mutually agree to change the terms of your agreement," the guide states. "But your agreement and/or state law may govern when it can be changed or terminated."
What else has NAR been telling consumers? NAR has added a number of consumer guides to NAR Settlement: Get the Facts, from what sellers should know about offers of compensation to what veterans should know about buying a home.