The NAR Settlement has completely changed the landscape when it comes to buyers and their agents. Now a buyer broker must have the buyer sign a Buyer Broker Agreement prior to representing the buyer. Further, the Agreement must detail the compensation that the buyer will owe to the buyer agent. The point of the NAR Settlement was to provide buyers with transparency so they can better understand what they are paying and how it is being paid. However, many different versions of the Buyer Broker Agreement have appeared and the terms of many of these agreements is troubling. Often, the agreements are purposely written to not be easily understood.
Tanya J. Monestier, a Professor of Law at the University at Buffalo School of Law did a deep dive into some of these new agreements and the results are startling. Her Report of Buyer Representation Agreements Post NAR Settlement reviews many of these agreements and she points out many of the pitfalls.
One of the most disturbing clauses is that some agreements allow for the buyer agent compensation to be increased simply by signing an addendum or modification agreement. The simplicity of revising the compensation structure after the original agreement is signed undermines the whole point of signing an agreement at the outset. This appears to be in conflict with the NAR settlement.
At Homebuyers Law, we set compensation with you in the original agreement. All terms are clear and explained. No tricks. If the seller is somehow offering a seller credit that is in excess of the amount needed, that money stays with the buyer. We will not look to increase our fee to take the additional credit from you, the buyer.
If you are about to sign a Buyer Broker Agreement, you need to have an attorney review the agreement first to make sure you don’t fall into one of these traps. At Homebuyers Law we will review a Buyer Representation Agreement for you. Contact us at help@homebuyerslaw.com.