Understanding Buyer Agency
While you don't need to work with a buyer agent, almost 90% of home buyers do, and in a competitive market like ours, it is a huge advantage to have an experienced advocate to guide you through the process.
Designated buyer representation
When you enter into a buyer representation relationship, your buyer agent is bound by Massachusetts state law to work for your best interests and negotiate the best price and terms for you. Your agent owes you all of the following fiduciary duties:
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Undivided loyalty
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Lawful obedience
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Reasonable care and diligence
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Full disclosure
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Confidentiality
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Accounting for funds
Remember that your buyer representation agreement is only between you and your designated agent(s)—other agents, regardless of their broker affiliation, are not representing you. However, they are still required to be honest and fair, and disclose any known material property defects.
Buyer agent commission
Until August of 2024, listing agreements between sellers and their agents generally included provisions for not only the list agent commission, but also designated a portion of that amount to be paid to the broker who brought the buyer. However, a recent legal settlement with the National Association of Realtors requires that buyer agent compensation be negotiated directly between buyers and their agents. Changes resulting from this settlement include the following:
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It is now required that all buyers have a written contract for buyer representation that states the services their agent is providing and the agent's fee for these services, which will be the direct responsibility of the buyer.
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However, sellers are still allowed to provide financial concessions, and as a buyer, you are allowed to negotiate with the seller directly regarding payment of your agent’s fee. Effectively, what this means is that any offers you submit can include a condition that the seller cover all or part of this fee -- similar to having a financing or home inspection contingency. In this way, your buyer agent fee should be financeable as part of your mortgage.
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Our local MLS (MLSPin) has maintained a field for offers of buyer agent compensation, and some agents are continuing to publish specific offer amounts in their listings, though any amount offered is still considered negotiable, so should be taken with a grain of salt, as the seller may elect to raise, reduce or even entirely remove their offered compensation for the buyer agent at any point in the offer negotiation process.