Tahoe Real Estate – Who pays the Buyers’ Agent Commission?

Real estate is a local market.

What may be typical in one area, or nationally may not be how things are handled here in the greater North Lake Tahoe – Truckee area.

In the Tahoe real estate market “who pays the buyers’ agent commission?” is a common question I’m often asked by my out-of-area, second home/condo buyers.

In the greater North Lake Tahoe – Truckee area, as of late summer 2024, how Buyers engage with real estate agents will change.

As of August 17, 2024, Buyers need to be prepared to do the following:

All Buyers must sign and enter into a Buyer/Agent Representation Agreement (also known as a Buyer Broker Agreement) prior to seeing/viewing/being shown any properties.

Buyer Commissions, which were offered by Sellers (paid by Sellers) are no longer published in the Multiple Listing Service (MLS).

What does this mean?

A Buyer Broker Agreement will establish how much their Buyer Agent is paid, upfront before seeing any properties. Buyers and their agents will agree to how much (%, or $ amount to be paid).

The agreement will establish if the agreement is “Exclusive” or “Non-Exclusive”.

An “Exclusive” agreement means the Buyers’ Agent gets paid regardless whether you use them or not during the agreement period.

“Non-Exclusive” means the Buyers’ Agent only gets paid on the properties/search parameters identified in the Buyer Agreement. That means as a Buyer you could work with more than one Buyer Agent, but only owe a fee to the agent that helps you buy a specific property if your agreements are “Non-Exclusive” and are specific to properties.

Buyer Caution Tip: If you are more general and just identify a zip code, or neighborhood, you have the potential to create a situation where you owe more than one agent fee for just one sale, so Buyers need to take caution as they enter these agreements.

If you are asking yourself:

“Do I have to sign a written agreement and agree upfront as to how much the Agent that shows me a property will be paid, by the Buyer, before I’ve even seen any properties by them?

That answer is YES, no exceptions.

How real estate is purchased, negotiated, and the terms a Buyer will now agree to, will include how much their Buyer Agent is paid.

The Cost of a Tahoe Buyers’ Real Estate Agent is Negotiable!

Starting August 17, 2024 (as a FYI the State of California is looking to make this a law for all licensed agents/brokers by January 2025):

All Buyers will need to enter into a written Buyer Broker Real Estate Agreement prior to doing any real estate activities, including looking at property for sale.

The days of calling a local Tahoe real estate agent and asking to see a home they have identified that is for sale either on-line, or by physically seeing a sign on the property has changed. This change is not just for the North Lake Tahoe – Truckee area, or for just California this is a nationwide change!

Most likely last minute showing will become less frequent, and you are going to have to share your information in order to have the paper work prepared in advance of seeing any property.

This isn’t the end of the world, and once you’ve gone through the process, it won’t feel so over-whelming moving forward.

Depending on the real estate agent, they may be able to accomodate last-minute showings, and they may agree to a non-exclusive, 30 day or less agreement to see the property, but you will have to enter into an agreement.

You will have to agree upfront to pay the buyer agent a fee. What the fee will be is up to you and the real estate agent to agree to upfront.

If you aren’t willing to agree in writing, then you need to be prepared for that real estate agent to say:

“I’m sorry I can’t help you…”.

Before you call the Listing Agent (also known as the Sellers’ Agent) to see the property believing they can show without a written agreement and jumping through the hoops – think again. This rule also applies to them.

Let’s back up and review what has happened.

The governing rules for real estate agents (right now REALTORS, but soon will require all California Real Estate licenced sales persons and/or Brokers) will now require for Buyers to enter into a written Buyer Broker Agreement prior to seeing any property, or engaging in any real estate activities with an agent.

Think of this procedural change similar to a Seller listing their property for sale. A real estate agent can’t just put a “For Sale” sign, or tell others what the listed price is without first putting a written listing agreement in place.

Buyers and their Real Estate Agents will now agree upfront, how much the agent is to be paid. Just like a listing agreement agrees to pay the Sellers’ Agent upfront a fee before they have found a buyer and sold the home.

It’s the same concept. Buyers are going to agree to pay their agent a fee before they have found a property to buy.

Yes, this is a big change in how things will be done in the industry. Why make this change? The change is a direct result of recent litigation.

Bottom Line: A Buyer Broker Agreement will identify in writing how much a Buyer will pay for real estate representation and services with the goal of creating transparancy on how real estate agents are paid. How much they are paid. What services and expectations both sides will have of each other!

OPEN HOUSES | So this is a moving target on what rules agents are following. Since late May the rules and guideline

Some agents may ask you to sign in.

Some may have Buyer Agreements ready to hand out before entering.

Others may just have you see the property and if you do not have representation, at that time, in order to answer more detailed and specific questions a Buyer may have to enter into a Buyer Broker Agreement.

Buyers may decide to not sign, or provide any details, and that is their choice.

Buyers do need to be prepared that if they decide to not provide personal information that they may be denied access.

In my opinion, I think Open Houses will offer Buyers the easiest opportunity to see a property with the least amount of paper work.

These are significant changes in how real estate transactions have worked in the past and as a Buyer you need to be prepared for these changes.

You will have questions and you can call me at 530-414-1260 at any time to learn more about the new rules and procedures that will govern how we do things.

Why change? The goal, in a word is – “Transparency”!

While real estate commissions/fees have always been negotiable that negotiation was done by the Sellers’ Agent with the Seller. They negotiated how much would be offered to a Buyers’ Agent. That practice is being stopped.

Moving forward, Buyers will take a pro-active role in setting the fee their agent is paid.

A Buyer can also identify to their agent how they would like for that fee to be paid, including, only seeing properties that the Sellers Agent is identifying that their Sellers are open to, or have indicated they are offering a Buyer Financial Concession of either $X’s, or a percentage (%) of the sales price. It is your choice.

As an agent, I would recommend seeing all properties that may meet you needs in the area you what to purchase a property, so that you don’t miss out on an opportunity.

Even if it is a property that the Sellers’ Agent has said, no the Seller won’t pay any Buyer financial concessions, you may still want to see it.

Buyers and Sellers change their minds all the time, so I would go with “Everything is Negotiable Approach” and give yourself as many opportunities as possible when looking for the right property and situation.

If you are asking, do I really have to pay my agent, can’t we negotiate with the Seller to pay it? Yes, we can negotiate, but Buyers need to be prepared to pay for their side of representation. Be prepared to work your numbers forward and backward, so you are not caught without having enough funds for your transaction.

Buyer Agent payment options may include:

Buyers pay the fee directly with no financial Seller assistance.
Buyers negotiate through their offer for the Seller to pay (Partial Payment) a part of that fee.
Buyers negotiate through their offer for the Seller to pay the entire Buyer Agent fee.

Will a Buyers’ Agent know what Sellers are offering? Are they offering Buyer financial concessions, or offering to pay the Buyer Agent Fee? Is a Seller open to negotiating that cost as part of the purchase?

Your Buyer Agent should ask each Listing Agent/Sellers’ Agent what their Sellers are thinking when it comes to Buyer financial concessions.

In my opinion, an organized Buyers’ Agent that uses check lists, and has their list of questions they ask a Seller Agent before showing a property really becomes an asset for their Buyers, and adds value to the purchsing process as they gather information for you to consider on a property that may not be part of the public listing information on the Internet.

Information obtained from the Sellers’ Agent on potential Buyer Agent Fee Payment, or Buyer Financial Concessions is NOT A GUARANTEE that those terms will be agreed to in a purchase offer until that offer is in writing and the Seller agrees to it in writting.

Any term, including paying for the Buyer Agent Fee, or offering a dollar amount in the form of a Buyer Financial Concession, is not enforceable until it is agreed to by all parties in writing.

This means a Sellers’ Agent in good faith can tell a Buyers; Agent one thing, only to have the Seller say no when presented with those terms in an offer.

Sellers have the right to change their minds, so it is important to work with your Buyers’ Agent and understand your options when you prepare your offer to purchase.

Again, another big change is the elimination of Buyer Compensation in the Seller Listing Agreementm which use to be the provision that put paying for the Buyer Agent fee in writing, and allowing that information to be communicated to others with confidence. That is now gone, which means, everything is up for grabs.

What happens if a Buyer cannot through the purchase contract negotiations successfully get the Seller to provide a Seller financial concession to pay a part, or the entire Buyers’ Agent Fee?

If the Seller says no to paying for, or offering a financial credit for payment of the Buyers’ Agent fee, then the Buyer will be financially responsible for paying their own agent at the close of escrow, or based upon the terms they have agreed to in their Buyer Broker Agreement.

If you don’t have the extra funds to pay for your Agent, be honest, and let your Agent know upfront.

As a Buyer if you need the Seller to pay for your Agents’ fee, then you may need to limit your property search to only those properties that are promoting that the Seller is offering that financial concession and that the Sellers’ agent high a higher degree of confidence that they really know their Sellers’ position, or the Seller has agreed to that item as an additional term.

Asking questions of the Listing Agent will become a critical task moving forward.

Buyer Tip: Buyers should ask the Listing Agent if the Seller is offering to pay them (the Listing Agent) a separate Buyer Agent Fee (in addition to their listing fee) if a Buyer uses them to represent them on the sale of the property when they also represent the Seller.

This will tell you several things about the Seller, their motivation, and their perspective on Buyer Agent compensation:

First, it will tell you if the Seller is open to paying a Buyers’ Agent Fee.
Second it will give you an insight into their negotiation strategy. If the fee is very low, or is currently zero, and needs to be negotiated, it may indicate that as a Buyer you may end up paying for part, or all of your agents’ fee.
Third, a Buyer may find that the Seller has already set a reasonable Buyer Agent fee, and that you may get that same amount for having your own Agent.

The question becomes do you want your own advisor, your own professional, your own advocate to help you through a significant financial purchase and is only worried about your side of the transaction, the Buyer, or to use an agent that is working for both parties in the transaction. It’s a choice for you to make.

As your Tahoe Buyer’s Real Estate Agent, it is my goal to put money in your pocket, and to help you get you the best terms, and deal. Understanding the process, and asking the questions, getting information so that you can make the best decisions at the time they need to be made is our number one goal.

If you are in a multiple offer situation, we want to help position your offer in its best light given your situation.

My focus is on you and not divided between you and the Sellers’ goals and objectives.

Everyone should have representation; talk to Laura Allen your Tahoe Buyers’ Real Estate Agent.

Need more help in trying to figure out your North Lake Tahoe – Truckee home/condo buying options?

Do you want to learn more about the different neighborhoods, locations, developments and their amenities, HOA fees and the ones that will best meet your needs?

Call me at 530.414.1260 and I can help you find the right place to buy!

Thinking about making Lake Tahoe, California your second home? Check out the homes that are for sale here:

Want to see what condos are for sale in Lake Tahoe? Here are the current listings:

Search the Truckee – North Lake Tahoe area by map here: homes, condos, lots!

Here are some popular North Lake Tahoe Communities:

How about making Truckee your second home? Check out what is for sale here:

Here are some popular Truckee area neighborhood options:

For all of your Tahoe real estate needs –

Laura A. Allen | 530.414.1260 | Laura@TahoeLaura.com
BROKER ASSOCIATE | North Lake Tahoe – Truckee Real Estate Professional, Advisor, and Agent
CalRE# 01473598
Coldwell Banker | Tahoe City – Truckee, CA

All information is deemed reliable, but is subject to change, and/or correction without notice.

Tahoe Real Estate – Who pays the Buyers’ Agent Commission?

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