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We are over the hump. After more than a year of sensationalized articles and a lot of uncertainty and fear in the media, the August 17 law change has taken effect, and we are on the other side. The reality of professional fees for buyer agents being an additional term to negotiate as part of a home purchase is now the norm. What does this mean for you, as a buyer or seller, in any transaction post-August 17, 2024? The news is good.

Months before the change started taking effect, the concern and chatter in the agent community were consistently underlying all conversations between buyer and listing agents when scheduling showings or discussing the market value of any property. “Will the listing agent be paying cooperative compensation?” “How much are they offering?” “Will it be the standard 2.5%?” And therein lay the problem before: the word “standard.” Now, to the benefit of both buyers and sellers, there will be more open conversation about the value that buyer agents bring to the table. It was always negotiable, and now we are all aligned in addressing it as such.

A professional fee has always been, and will always be, a requirement for any person in business who offers a service. For the first time, buyer agents have to demonstrate their value, being more transparent about the challenges we face and the behind-the-scenes battles we fight. This allows for better understanding between buyer clients and their agents about the value the agent provides.

The Crucial Role of Buyer Agents

We’ve all been there: the agent on the property, spotting a structural concern, negotiating $30,000-plus in price reductions and credits, balancing the buyer’s immediate financial needs to close on a property, and thinking long-term about necessary improvements. It’s about knowing how to identify and insist on a termite test, negotiate remediation, and correct issues in the short term while benefiting the new homeowner substantially in the long run. If these issues weren’t found before closing, the impact could be significant. Buyer agents bring a wide range of value, from understanding the leverage and limitations of a buyer’s offer to piecing together the puzzle to secure each client’s home. In contrast, an inexperienced agent might have advised waiting another year, resulting in a loss of built equity for the buyer.

The value of a buyer agent doesn’t stop at cash value or negotiating property condition issues; their guidance throughout a transaction often ensures that buyers make it to the closing table. This guidance can prevent a buyer from losing the expenses paid in the initial phase of a transaction, such as inspection and appraisal costs. It could easily cost a buyer $1,000 or more each time they go under contract and ultimately fail to close if creative solutions aren’t found. Every transaction presents its own hurdles, and having a knowledgeable guide not only saves money but also ensures that appropriate value is attached to the property and every obstacle along the way.

Bringing Value to the Forefront

There’s simply no question about the value of buyer agents—not only as guides but also as safeguards against runaway pricing in any market. The idea that their services are “free” to the buyer has never sat well with any experienced buyer agent. For many of us, bringing our value upfront in the conversation is a relief. For the first time, we’re forced to share more about the value we bring—and the danger of not knowing what you don’t know.

So, what’s different now, and how are we, as experienced agents, handling the change? While it would be a stretch to say nothing has changed, in practice:

  1. We take more time to explain how buyer compensation is part of the transaction’s expenses and how we can align it with your goals when writing offers. This has always been part of our process.
  2. We ensure our clients are aware when a service forms part of our business practices, with refined systems and processes that ensure a predictable result, rather than surprising them with a great outcome. It takes years to build a long-standing track record, and now we share more about how it’s done, instead of just flaunting another property changing hands.
  3. We’ve started valuing our time more, recognizing our value in comparison to less experienced, less professional, and less savvy agents we negotiate against in the market.

When choosing your agent, consider their track record and experience. The unlikely hurdle an experienced agent has already navigated might be the one you encounter.

Decide whether you trust your agent from the start. There are no test runs to see if you work well together before committing. Trust your gut—it will be good practice for your upcoming transaction.

Ask questions about the current market environment and what, if anything, your agent has in place to adapt to the situation. Every season presents its own challenges, and an agent (or team of agents) with experience, savvy, and the bandwidth to manage it will repay you in spades in the end.

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For more information, reach Two Door Group Co-Founders Adele Lang & Jen Vest at twodoorgroup@compass.com, or hit the Contact Us button up top!