The recent changes surrounding buyer representation agreements (BRBCs) have started to reshape how agents navigate their commissions, especially when dealing with new build properties. Traditionally, real estate agents have faced challenges when their clients showed interest in new construction homes. Many developers have been known to cut out referral fees to agents, particularly in low-inventory markets like California. This has often put agents in a difficult position, knowing that showing a new build to their clients might mean losing out on compensation for the time and effort they’ve already invested.
However, following the August 17th NAR settlement changes, the dynamics have shifted significantly.
The Impact of the NAR Settlement Changes on New Builds
Under the new rules, buyer agents are now required to have a signed buyer representation and broker compensation agreement (BRBC) before showing properties. This agreement clearly outlines the commission obligations between the buyer and their agent, which has empowered agents to secure their earnings even when their clients decide to explore new builds.
Many builders continue to claim they don’t cooperate with agents or pay referral fees. However, when faced with a BRBC, builders are finding themselves reconsidering their stance. In many instances, when the builder’s agent is made aware of the buyer’s obligation to pay their agent’s commission as stipulated in the BRBC, they are more inclined to offer some form of compensation.
New Build Developers and Changing Practices
While some developers still push back, stating they don't "co-op" or pay referral fees, the presence of a BRBC often prompts them to negotiate. Though there have been cases where builders counter the original commission amount down, they are, in many situations, willing to pay something—an improvement from their previous hard stance against any form of agent compensation. This shift is creating a more balanced market where agents can confidently show both resale homes and new builds, ensuring they are fairly compensated for their work.
Why This Change Matters
For real estate agents, this new environment means a fairer market and more confidence in providing comprehensive service to their clients. They can now guide clients through the entire home-buying process, whether for resale properties or new builds, without the fear of not being compensated. This includes submitting offers, negotiating credits, and offering guidance throughout the entire buying process, adding immense value to the client-agent relationship.
These developments not only protect the interests of agents but also enhance their ability to serve their clients better. It ensures that buyers get the benefit of professional guidance throughout their property search and purchase, whether it's a new build or an existing home.
For more insights on how the recent changes impact buyer and seller dynamics, check out our blog on New Open House Rules and learn how to navigate the evolving real estate landscape.
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