What Buyer Agents Need to Know About Commission Changes

By Kandie Frederick

Growing up on the central coast, Kandie is a third generation family in the North County and a second generation family in real estate. Joining Country Real Estate in 2000, and graduating from Cal Poly in San Luis Obispo, she brings a background of Agricultural Business to combine with her knowledge of the local real estate market. Working with her family and their decades of local real estate development, she is deeply connected to the roots of our community and its growth.
“This area continues to grow as people discover what a great travel destination it is, and what a great wine region it has become. Eventually, they realize what a great place it is to live and work as well. Adapting to the needs of our clients in a changing environment is always a priority. We remain the longest standing brokerage in a community we are deeply invested in. Our longevity is attributed to our innate ability to understand the North County: its people, its properties, and its culture.” -Kandie

Hey agents! There are some noteworthy headlines circulating about potential changes to commission models, particularly affecting Buyer Agents. Today, let’s discuss how you can prepare for these possible shifts in the industry.

Recently, a landmark legal battle within the real estate sector resulted in a jury ruling that could have far-reaching implications for the national market. The focus of this legal dispute is our current compensation model, specifically Buyer Agents’ commissions. While the battle is ongoing, it’s crucial for agents, especially those who primarily work with buyers, to be proactive and ready for potential changes. In California, our contracts address these concerns, providing a measure of reassurance. However, the impact of this legal battle could significantly alter your business. Here are three steps you can take right now to safeguard your business and navigate future uncertainties:

1. Educate and communicate with clients. Central to the legal question at hand is the widespread confusion surrounding how and why Buyer Agents are compensated. To address this, ensure you sharpen your value proposition, clearly communicating the unique benefits you bring to the table. As Buyer Agents’ commissions may become subject to negotiation, your ability to demonstrate your value could directly impact your future earnings.

2. Consider using buyer-broker agreements. Regardless of the different names these documents may have in various states, buyer-broker agreements serve a common purpose – to legally protect both your and your clients’ interests. These agreements outline the specifics of how much and how you will be compensated for your services, eliminating any potential confusion. By having a clear agreement in place, you not only safeguard your compensation but also provide your clients with peace of mind regarding the value you bring to the table.

3. Shift focus to sellers. While the details of the legal battle’s outcome are still uncertain, it appears that the current commission model for listing agents will remain largely unchanged. In the face of market uncertainty, consider shifting your focus from buyers to sellers for more stability. This strategic move may position you for long-term success in an evolving market.

If you primarily work with buyers and are contemplating a shift to sellers, reach out to me for advice. Navigating this complex topic requires careful consideration, and I’m here to help you maneuver through the current uncertainties in our market. Feel free to call or email me – let’s navigate this journey together!