By now, I am sure you’ve seen the headlines in the news regarding the recent class action lawsuit against the National Association of Realtors (NAR) and how buyers’ agents’ commissions are being paid. If you haven’t already read our recent article on this matter, be sure to click over and see our opinion and thoughts on many of the common myths and false information going around about this lawsuit. One major topic of discussion these days due to this lawsuit is how buyers’ agents are being compensated. Historically, it was very common that the buyer’s agent commission was paid for out of the gross negotiated commission by the listing agent, referred to as a co-op. After this lawsuit, many believe it is better for the buyer to pay for the buyer’s agent commission directly, and this is the news that is being spread. So, what does this mean if you’re looking to buy a home?

12-30-23_Buyer Agents Paying Commission_inset.jpgFirst, don’t worry. You’re not going to have to go about making the largest purchase of your life on your own. TK Homes and our agents aren’t going anywhere, and we’re dedicated to helping homebuyers purchase their next home. We are still here to identify available homes that meet your specific criteria, schedule and show you these homes, and then help you determine what to offer to purchase the home that will not only be fair for you, but attractive to the homeowner. Once we successfully negotiate on your behalf and get you under contract, we’ll help you to navigate through the 26-page long purchase contract to ensure you make it to the closing table. We’ll be there during the inspection, help you draft your Inspection Objection, negotiate the needed repairs or concessions on your home, provide invaluable support for your financing and appraisal and finally make sure you have all your questions answered during your closing. The 15+ years of experience TK Homes offers to its buyers isn’t going anywhere; we can assure you that. However, with the current times, there are conversations we need to have pertaining to buyer’s agent commission, and just like we wouldn’t expect anyone to do their job and provide their time, money, and expertise for free, we are not able to either.


However, this recent lawsuit has tried to make an argument that putting our fee as your buyer’s agent directly on you as a buyer is in the best interest for homeowners and buyers alike. Due to this, there are some sellers that are testing the waters with this theory by not offering a co-op commission for a buyer’s agent. So, what does this mean for buyers?

In the event that a seller is not offering a co-op commission, it would fall directly on the buyer to pay the buyer’s agent fee. This fee would be in addition to the down payment and closing costs required by a lender and inspection fees. This would instantly increase the cost of purchasing a home by 2-3%, a large enough sum of money that could reduce the amount of home a buyer could afford. The good news is buyers do have options.

The biggest option right now is to negotiate a co-op commission at time of contract; this would mean that if a seller accepts your offer, a condition of the offer would be that the listing agent pays the buyer’s agent. This is more traditional and how most transactions have been completed to date. The benefit to this is that the fee comes out of the final proceeds of the home, effectively allowing a buyer to purchase the home with a lower cash to close figure, making it easier to qualify and come up with the down payment, closing costs and inspection fees. Negotiating this co-op becomes just another term of the contract, similar to negotiating a purchase price, seller concessions or interest rate buydowns.

The next option is if the seller is unwilling to accept an offer with a co-op fee. The fee is paid for directly by a buyer. It is important to remember that as a buyer’s agent we only get paid if we are successful and get you to the closing table, so there’s no risk in the event that the transaction terminates for any reason. Also, since this is a term that is discussed and negotiated at the time of contract, you will have this information upfront when making a decision on how to structure your offer.

We realize that this extra fee for buyers is a big deal when you consider that saving up for a down payment and closing costs is already such a huge commitment. So, some stats to help remove the concern. When we recently spot checked 100 new listings across the Denver metro area, only 5 of those listings were not offering a co-op commission upfront. The chances of the seller offering a co-op is still 95%. This is great news and reason to not let this lawsuit scare you away from pursuing your dream of homeownership.

To wrap this informative article up, I want to share my thoughts on why 95% of sellers are still offering to pay a co-op when so many media forms are saying they don’t have to (which has always been true by the way). It comes down to simple math. The best way to sell your home for market value is to increase your buyer pool. By forcing a buyer to pay an additional 2-3% for your home, you’re reducing the buyer pool for your home, thus drastically reducing the likelihood of selling your home or at least selling it for market value. To put it simply, by making it easier for a buyer to buy your home, you are securing a higher sales price.

As always, at TK Homes, we strive to provide our clients with up-to-date information pertaining to real estate and are committed to making sure our clients are taken care of throughout their real estate transaction. If you’re ready to purchase your next Denver area home, contact us today, and let’s get your journey started!


~ Written by TK Homes CEO/REALTOR® , Trevor Kohlhepp


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