The Truth About Paying Buyer’s Agents in Distressed Property Deals
The process of buying distressed properties like short sales, bank-owned foreclosures, and pre-foreclosures can be complicated and stressful enough without having to worry about how to pay your buyer’s agent. In this video, I break down the details around buyer’s agent commissions and compensation in distressed deals.
While commissions have never been set in stone and are open to negotiation between agents and their clients, the process used to be more straightforward. Listing agents representing distressed sellers would determine with their seller client the total commission and then specify the portion that would go to a buyer’s agent who brings a qualified buyer. This would all be laid out upfront in the multiple listing service (MLS).
Now, two major changes have happened:
1. Listing agents can no longer advertise buyer agent commissions in the MLS. This means as a buyer, you don’t know upfront if the distressed seller is offering compensation for your agent.
2. Buyers are now required to sign a buyer’s agency agreement with their agent spelling out representation duties and responsibilities. This agreement will also outline compensation details negotiated between the buyer and their agent.
In the video, Who Pays The Broker FEE When BUYING A FORECLOSURE House I discuss whether these changes are positive or negative. The key takeaway is that real estate markets will dictate what makes the most sense for buyers and sellers regarding agent compensation. As an agent my goal is to help buyers and sellers understand their options so they can make informed decisions aligned with their goals.
The video covers additional topics like:
– Why buyer agency agreements create clarity
– How banks and lenders factor into distressed deals
– The pros and cons of dual agency
– How effective agent representation benefits all parties
Check out the full video Who Pays The Broker FEE When BUYING A FORECLOSURE House for all the details! I’m happy to answer any questions you may have. If you or anyone you know needs help buying distressed properties or avoiding foreclosure, please reach out!
