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EDITOR: DR DAWN KENNEDY (dkennedy@hrra com)
SALES: Misty Pritchett (advertising@ hrra com)
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Buyer Agency: Signed, Sealed, Delivered They’re Yours! p 09
Understanding Buyer’s Agency in Commercial Real Estate p.13
Dos and Don'ts When Working with Buyers p.17
JAY MITCHELL: PRESIDENT'S MESSAGE
“We may have gone through a lot of changes lately, but many aspects of our business remain in place. It's still all about relationships and preparing our buyers for the process. If they are well-informed, they are victorious!“
A good friend stopped by my office the other day and mentioned that his daughter is planning to purchase a house in another state. "Great," I said. "Can you help her?" he asked.
"Well, yes, I can refer her to a very good REALTOR® in that area," I replied. His response was predictable: "Oh, that would be wonderful! Thank you! I'll give you all of her information," he said
So, I called her to find out a bit more about what she had in mind She and her husband are first-time buyers and have been holding out for a "lower interest rate." Once the rates dropped closer to the 6.5 percent range, they decided now is the time to start the process.
What they want is as predictable as her father's response when I said I could refer her to a local REALTOR®: 4 bedrooms, at least 2 bathrooms, open concept, 2-car garage (it snows there), large fenced yard, in a nice neighborhood. For about $210,000.
I couldn't help but chuckle to myself Because she is the daughter of a good friend, it was time to have "the talk" you know, about pricing and inventory We talked for 30 minutes She was nervous about the process, so I spent the time reassuring her that the REALTOR® I had in mind would guide her through the process with flying colors. That REALTOR® is a friend of mine as well, so I knew she would be in good hands.
Before we hung up (yes, we used the PHONE!), I made some suggestions about what to expect in the next steps. My advice was:
Be realistic about what they want. Be willing to compromise (since it is a first-time purchase and probably not their forever home). Be certain of what they can and want to afford. Be willing to accept disappointment if they don't get the house they want on the first attempt Communicate openly and often with their REALTOR® Have FUN in the process!
I also explained the buyer agreement they would have to sign in their state and why that requirement is in place. Then, I called the REALTOR® I had in mind and shared the contact information.
Two days later, that REALTOR® called to say they had "found a house and would be closing in 30 days." At $325,000! Even better, the buyer did not have to provide any compensation to the REALTOR®. The seller was willing to cover that as part of the terms of the purchase agreement
We may have gone through a lot of changes lately, but many aspects of our business remain in place It's still all about relationships and preparing our buyers for the process. If they are well-informed, they are victorious!
Dear HRRA Members
DR. DAWN KENNEDY: CEO BRIEF
“Make the most of your dues investment and happy selling!”
I was hoping to get an update on the Department of Justice (DOJ) case with NAR. As you may remember, NAR settled with the DOJ back in 2020, but the DOJ backtracked and decided not to honor the agreement. NAR took the case all the way to the Supreme Court, which declined to overturn the ruling. According to NAR President Kevin Sears, “This ends the appeals process, as NAR has exhausted every available opportunity to fight for the interests of our members in our effort to hold the government accountable in honoring its agreements In light of the Supreme Court’s decision not to accept the case, the U S Court of Appeals for the D C Circuit’s decision will stand, and the DOJ will not be bound to the terms of the 2020 settlement agreement DOJ’s investigation will proceed ” However, there does not seem to be a rush to investigate, which could be considered a bit of good news
Regarding the settlement with the Sitzer-Burnett case, transactions continue. As a reminder, the VAR Form 500, Broker Fee Agreement, is available for download from the VAR website, Virginiarealtors.org, as a member benefit. You will need to log into the VAR site to access the form, but the direct link is here. The settlement itself is one of the greatest member benefits of our time, protecting REALTORS® and MLSs across the country. As a reminder, MLS corporations are covered under the settlement, not non-REALTOR® MLS users.
To date, local associations have not heard whether there will be a 2026 dues increase from NAR to assist in paying the settlement As a reminder, VAR automatically increases its dues by 3% every year, so although your HRRA dues or NAR dues may stay the same, the invoice does increase each year through VAR’s automatic price adjustment NAR, however, is being proactive in its efforts to conserve funds This week, it was announced that NAR would be eliminating 61 staff positions that were deemed redundant The impacted departments include Creative
and Content Strategy, Digital Strategy, Public Relations and Communications, Meetings and Events, Member Development, Human Resources, Member Engagement, Member Experience, Research, Finance, and IT. You may notice that the advocacy department remains untouched as it is the greatest member benefit; without a strong NAR, our industry, and frankly, our pocketbooks are at risk.
While it may seem unfair that REALTORS® bear the financial burden of providing advocacy for the entire industry while non-member firms benefit, the fact that they don’t support the industry that feeds them speaks volumes about their professionalism and longevity Recent statistics show that of the 2 million agents/licensees, only 1 3 million are actively engaged in the business Often, these nonmember firms are a churning mill for people who simply cannot survive in this industry While our primary benefit is advocacy, knowing that all in the business benefit, as your trade association, the three-way agreement (local, state, and national) provides a myriad of other benefits to add value in addition to advocacy. Using the REALTOR® brand and its tie-in to ethical behaviors and professional standards is a means to differentiate yourself from mere agents. The enforcement of professional standards is a benefit, saving untold amounts of money through avoiding the court process. In addition to RPR, Houselogic, the Center for Financial Wellness, REALTOR domains®, a ton of discounts on national brands (everything from FedEx to LG appliances to Lenovo laptops), specialized advanced education, and Photofy, the state associations offer a legal hotline, a no-cost subscription to the Forewarn safety app, a tech hotline, and forms library HRRA provides CE, specialized advanced education, a myriad of networking opportunities to increase your sphere, a highly recognized awards program, this magazine, pre and post license classes, brokerage license classes, and access to high-end specialty events
Make the most of your dues investment and happy selling!
Dr Dawn Kennedy
Professional Standards: A Deep Dive
Disclose! Disclose! Disclose! This was a title of a very popular 3-hour CE class in Oklahoma City, but where does a REALTOR®’s responsibilities end when it comes to pertinent facts? Where is the line? The NAR Case Interpretations are required policy and may be used in determining a violation. Each month the NAR case interpretation will be related on an actual complaint received by the HRRA Professional Standards staff.
Case #2-4: Obligation to Ascertain Pertinent Facts
(Revised Case #9-10 May, 1988 Transferred to Article 2 November, 1994.)
Shortly after REALTOR® A, the listing broker, closed the sale of a home to Buyer B, a complaint was received by the Association charging REALTOR® A with an alleged violation of Article 2 in that he had failed to disclose a substantial fact concerning the property. The charge indicated that the house was not connected to the city sanitary sewage system, but rather, had a septic tank.
In a statement to the Association’s Grievance Committee, Buyer B stated that the subject was not discussed during his various conversations with REALTOR® A about the house However, he pointed out that his own independent inquiries had revealed that the street on which the house was located was “sewered” and he naturally assumed the house was connected. He had since determined that every other house on the street for several blocks in both directions was connected. He stated that REALTOR® A, in not having disclosed this exceptional situation, had failed to disclose a pertinent fact.
REALTOR® A’s defense in a hearing before a Hearing Panel of the Professional Standards Committee was:
1 that he did not know this particular house was not connected with the sewer;
2. that in advertising the house, he had not represented it as being connected;
3. that at no time, as Buyer B conceded, had he orally stated that the house was connected; 4. that it was common knowledge that most, if not all, of the houses in the area were connected to the sewer; and
5. that the seller, in response to REALTOR® A’s questions at the time the listing was entered into, had stated that the house was connected to the sewer.
The panel determined that the absence of a sewer connection in an area where other houses were connected was a substantial and pertinent fact in the transaction; but that the fact that the house was not connected to the sewer was not possible to determine in the course of a visual inspection and, further, that REALTOR® A had made appropriate inquiries of the seller and was entitled to rely on the representations of the seller The panel concluded that REALTOR® A was not in violation of Article 2.
Advocacy Agency Advocacy Agency
I know you must be asking yourself where an article about advocacy fits in the theme of buyer agency. Well, I am so glad you asked. Buyer Agency is about commitment and trust between you, the REALTOR®, and your client It outlines the duties and responsibilities of the parties, whether the agreement is exclusive, the duration of the agreement, commission and compensation, cancellation policy, and the scope of representation.
Advocacy for the association works in much the same way. First, your association GAD and Government Affairs Committee are committed to advocating for you, your clients, and the real estate industry. What does that mean? It means we have a duty and a responsibility to establish and maintain relationships with various government and community entities. These relationships forge alliances and open doors to REALTORS® who have a seat at the table in the community. Our REALTORS® have become a vital resource to city council members, planning directors, economic development directors, and other city leaders on questions of solving housing issues across South Hampton Roads.
Your advocacy team works exclusively on behalf of REALTORS® and the Hampton Roads REALTORS® Association (HRRA) to educate the public on why choosing a REALTOR® rather than a non-member real estate agent is the best decision they will make in the home-buying process. The REALTOR® story, brand, and yes, the fight for private property rights magnifies the commitment to excellence that clients expect from their REALTOR®.
The dedication of the advocacy team is ongoing and forward-looking We remain consistent, loyal, and zealous for your right to conduct business and the clients' right to choose the best representation for their interests. Our only job is to ensure that REALTORS® do not only facilitate home buying but
also facilitate the American dream for everyone who wants it. There is no expiration date on advocating for your success!
The scope of advocacy for you is scalable Your association advocacy team continuously monitors regulatory activity in south Hampton Roads and is ever ready to act on your behalf That is just one side of the advocacy effort. The other side is you. We rely on you, our beloved members, to partner with your advocacy team through issues mobilization to get a regulation or ordinance passed or defeated. Your advocates in the association are proud to work with you and for you to ensure that your clients’ road to homeownership is wide, smooth, and magical. Advocacy Agency means commitment, loyalty, and excellence.
RPAC (REALTORS® Political Action Committee) plays a critical role in our efforts to get laws passed and in our efforts to elect candidates who understand the importance of protecting private property rights That is where you come in Your RPAC (REALTORS® Political Action Committee) contributions make the fight possible Please consider joining the fight for you and our precious clients.
We all know that the recent court decisions regarding disclosure of agency relationships have sent some ripples through our little pond. We’ve worried over how we are going to get paid, whether people would see our value, and whether buyers will have adequate protection in the home buying process. With the availability of online tools to every buyer out there, we’ve wondered if buyer’s agents would eventually be replaced by touring agents who are hired for one house or one day to open doors for buyers Some of the online services have seemed to move in that direction, creating the impression in buyers’ minds that they can just click a date and time to see a home on the services’ website and someone will show up to unlock the door.
The reality is that buyers have never needed representation more than they do today. Real estate transactions can be complicated. Virginia is a buyer beware state, yet even if buyers know that, they have very little idea what they need to investigate and how to go about doing that. Most buyers only buy a few homes over the course of their lifetime, but laws and local customs change from state to state and year to year. Buyers need dedicated guidance from REALTORS® who have developed the expertise needed to protect the buyers’ interests. In Virginia, however, if we’re honest, not a lot has changed We’ve been using
Linda Ross
REALTOR®, The Real Brokerage, LLC
Buyer Representation agreements for many years, so the biggest shift for us is the requirement to have a transparent discussion about how much we will be paid and who is responsible to pay us. While that matters to us, it’s often less important to buyers than we think. What matters to them is how we can help them and how they benefit from the agreement. The best way to communicate that is to take time to read and understand the buyer representation agreement yourself with your focus on how it protects the buyer. Presenting the agreement from that perspective will help the buyer easily and confidently agree to the terms.
All REALTORS® are required under the terms of the lawsuit settlement to have written buyer representation agreements prior to showing homes Because REIN opted into the settlement, even nonREALTOR® members of REIN must have written buyer representation agreements as well.
There are several kinds of agreements that can be signed with buyers: Standard Representation Agreements, Limited-Service Agreements that define the services the agent will provide, or Independent Contractor Agreements. The type of agreement used with each buyer depends on what your broker allows and the buyer’s needs. The agreement can cover specific properties or a date range Buyer Agency:
According to the Virginia Association of REALTORS®, every buyer representation agreement must contain the following terms:
1.
A specific and conspicuous disclosure of the amount or rate of compensation you will receive or how this amount will be determined, to the extent that you will receive compensation from any source
2
The amount of compensation in a manner that is objectively ascertainable and not openended.
4.
A term that prohibits you from receiving compensation for brokerage services from any source that exceeds the amount or rate agreed to in the agreement with the buyer; and
3. A conspicuous statement that broker fees and commissions are not set by law and are fully negotiable.
Buyer Representation agreements are available for all REALTORS® from the Virginia Association of REALTORS® website, and for all REIN members through REIN’s Instanet platform. Some brokerages have their own forms. Check with your broker for their preferred form source. Contact the VAR Legal Hotline for legal or ethical questions about Buyer Representation Agreements.
H A P P E N I N G S O O N A T H R R A
H A P P E N I N G S O O N A T H R R A Click here to view all our upcoming events and educational opportunities!
REALTORS® IN ACTION
RPAC Major Investors Event, DEI Women in the Workplace Event
Understanding Understanding Understanding Buyer’s Agency in Buyer’s Agency in Buyer’s Agency
in Commercial Real Estate Commercial Real Estate Commercial Real Estate
When most people think of buyer’s agency, they often associate it with residential real estate However, in the commercial world, buyer representation is just as important A commercial buyer’s agent serves as a trusted advisor, ensuring that investors, business owners, and developers make well-informed decisions when purchasing commercial properties.
The Financial Role of a Commercial Buyer’s Agent
One of the biggest differences between residential and commercial transactions is the financial complexity. In commercial real estate, every deal is fundamentally an investment decision which means as a buyer’s agent, your role extends beyond just finding the right property. You must be wellversed in financial analysis, market trends, and investment strategies to truly add value to your clients
Understanding the Numbers
Commercial buyers aren’t just looking for a place to live they’re looking for cash flow, appreciation, and long-term returns. This means understanding key financial metrics like cap rates, net operating income (NOI), debt service coverage ratios (DSCR), and internal rate of return (IRR) is critical. As a buyer’s agent, your ability to break down these numbers will directly impact your client’s confidence in the deal.
Risk Assessment & Due Diligence
A great deal on paper isn’t always a great investment A strong buyer’s agent helps clients identify financial risks, such as hidden expenses, tenant turnover, zoning changes, or environmental concerns. Performing thorough due diligence including lease audits, expense verification, and
Many commercial buyers aren’t just making a onetime purchase they’re building portfolios. A strong buyer’s agent helps clients strategize for future acquisitions, exit planning, and portfolio diversification. By offering financial insight and long-term planning, you become a trusted advisor rather than just a transactional agent.
Final Thoughts
If you’re working with commercial buyers, your value goes far beyond locating properties Understanding the financial fundamentals of commercial real estate is what sets a great buyer’s agent apart By mastering financial analysis, helping clients navigate financing, mitigating risks, and structuring profitable deals, you position yourself as an indispensable resource in your clients’ investment journeys.
B e t h e u l t i m a t e r e s o u r c e ! S h a r e
N A R ’ s p o p u l a r a n d g r o w i n g s e r i e s
o f C o n s u m e r G u i d e s E a c h o n e -
p a g e r e s o u r c e g i v e s c l i e n t s a
h a n d y o v e r v i e w o f k e y a s p e c t s o f
t h e r e a l e s t a t e t r a n s a c t i o n , l i k e
n e g o t i a t i n g w r i t t e n b u y e r
a g r e e m e n t s a n d u n d e r s t a n d i n g
o f f e r s o f c o m p e n s a t i o n . T h e y ’ r e
a n i n v a l u a b l e w a y t o s t a r t
c o n v e r s a t i o n s w i t h a n d e d u c a t e
c o n s u m e r s A f t e r a l l ,
k n o w l e d g e a b l e h o m e b u y e r s a n d
s e l l e r s a r e y o u r m e m b e r s ’ b e s t
a d v o c a t e s .
G i v e t h e g u i d e s w h i c h a l s o a r e
a v a i l a b l e i n S p a n i s h t o c l i e n t s a s
h a n d o u t s o r i n c l u d e t h e m i n y o u r
s o c i a l m e d i a f e e d s a n d o t h e r
m a r k e t i n g c o m m u n i c a t i o n s t o
d e m o n s t r a t e y o u r v a l u e N A R
c o n t i n u e s t o a d d n e w g u i d e s , s o
m a k e s u r e t o b o o k m a r k
f a c t s . r e a l t o r , w h e r e y o u ’ l l f i n d
t h e l a t e s t a d d i t i o n s .
AFFILIATE SPOTLIGHT
Name: TitleQuest
Territory: Virginia and Northeastern North Carolina
Year Established: 2001
HRRA Affiliate Member since: 2013
Company Details Contact Information
locations: Greenbrier, Lynnhaven, Great Neck, and Harbour View
w: titlequest net
p: 757 609 2900
Residential and Commercial Title Insurance and Closings
Successfully helping Real Estate Professionals grow their businesses through education, networking, marketing, and ancillary business opportunities We provide peace of mind to buyers and sellers of real property
Why we got into this business: The managing principal of our company started in the title insurance industry in 1987 working with a national title insurance underwriter and handling commercial transactions for corporations located in New York, New Jersey, and Connecticut After working for two national underwriters and seeing the opportunity to provide customers a better service experience, he founded the TitleQuest Companies with a simple yet powerful belief: every real estate transaction deserves the utmost care and security We do this by bringing clarity and confidence to an often-complex process, ensuring that every client has peace of mind Our commitment to integrity, precision, and personalized service has been at the heart of our mission since day one
Why we joined HRRA: We have a charitable wing, TitleQuest Outreach, whose mission is to contribute and serve our community In the same way that our outreach team allows us to connect to our community on a more personal level, our affiliation w/ HRRA allows us to connect to our professional community, and to contribute and serve our local industry.
Why we love doing what we do: What drives us every day is the opportunity to make a tangible impact in people’s lives and real estate businesses. We love being part of an industry that not only helps individuals achieve important milestones in home ownership and real estate investments but also lays the foundation for families, businesses, and communities. Each closing is a chance to celebrate someone’s dream, to build lasting relationships with REALTORS® and clients, and to contribute to a marketplace where trust and security are paramount Knowing that our work safeguards what matters most inspires us to continually raise the bar and serve our community with passion and dedication.
Our favorite satisfied customer story: One of our most memorable experiences involved a first-time homebuyer who was on the verge of losing her dream home due to an unexpected title discrepancy. Days before closing, a lingering lien surfaced a detail overlooked in previous records Tension was high and it looked as if her long-awaited transition to home ownership might fall through Our team immediately mobilized, working closely with the client’s REALTOR®, lender, and underwriting counsel to investigate and resolve the issue Through detailed document reviews and swift coordinated action, we uncovered the root of the problem, correcting and ensuring clear title
Our favorite HRRA event and why: For the same reason Thanksgiving is such a dynamic holiday, we love the Annual HRRA Chili Cook-Off! Food unites people so beautifully and naturally, representing various regional and cultural influences. This event can be downright transcendent!
Most memorable HRRA moment: While the Chili Cook-Off is tough to beat, so is the Affiliates Kickball Team! In the 2024 REALTORS® vs. Affiliates Kickball Game, a highpoint was seeing the affiliates bring home the championship trophy for the second consecutive year!
Best piece of advice to REALTORS®: “Yes, it matters where you close.”
The one thing we want REALTORS® to know about our industry is: As title and settlement agents, our primary goal is to protect your most valuable referral source: your clients. Referring a client to a closing agent is a reflection of you that can have a positive or negative effect on the future referrals you receive Facilitating closings and underwriting title insurance is all we do; we are not focused on other lines of business or practice
Back to the Past
By: Dr. Dawn Kennedy
We are now about half a year out from the finalized National Association of REALTORS® (NAR) settlement. It is important to remember that brokers and agents who are not REALTORS® have no protection from copycat lawsuits being filed regarding buyer’s agents’ commissions. While the regional MLS may require all agents and brokers to follow the new practices under the settlement agreement, that alone does not provide blanket protection. Many MLSs opted into the agreement, protecting the MLS corporation itself, but not its users, subscribers, or participants. REALTOR® associations are also covered under the settlement as corporate entities. The only practitioners who have protection under the settlement are REALTORS® Given the complete misunderstanding of our industry by the courts and juries, it is not surprising that class-action attorneys have not yet targeted the lucrative sector of real estate agents and brokers who are not members of the National Association of REALTORS® with copycat lawsuits. It leaves one to wonder just how many non-REALTOR® brokerages are out there, ready to fight a multi-million-dollar class action antitrust suit. Only time will tell.
The settlement also takes us back to pre-internet times and the origination of the Multiple Listing Services (MLS). The concept was broker reciprocity, not to be confused with license reciprocity, founded on “I’ll help you sell yours if you help me sell mine” (NAR, nar realtor, 2025) By cooperating with each other, consumers are served at the highest level; a published NAR analysis in 2014 explains:
Article 3 obligates REALTORS® to cooperate with their competitors on mutually agreed-upon terms when it is in the best interest of the client. This obligation promotes harmonious teamwork by competitors to the benefit of buyers/tenants and sellers/lessors. The real estate market is best
served when individuals with a variety of skills and resources work together Cooperation optimizes the benefits available to clients and customers, as well as agents and their subagents. Cooperation ensures sellers and lessors of the broadest possible market exposure. Through cooperation, brokers are able to enhance the market exposure of listed property and their ability to serve the needs of prospective purchasers and tenants.
While the Code and NAR do not set or address commissions, REALTORS® are never obligated to provide services without payment. Prior to internet platforms, distributed databases, and even published books, broker reciprocity was an integral part of the development of the modern MLS So how did brokers communicate how they would pay another broker for helping to sell their listing? Through unilateral offers of compensation or bilateral offers of compensation, a broker-tobroker agreement. NAR, in its July 2024 Fact Sheet, Broker to Broker Agreements 101, reminds brokers that offers of compensation can be made off-MLS.
Settlement requirements still apply, including the seller’s consent and the rule that buyer brokers cannot accept compensation from any source that exceeds the amount agreed upon between the buyer broker and the buyer. So why use a brokerto-broker agreement? According to the fact sheet, the listing broker and buyer broker may negotiate and agree to an offer of compensation prior to the home tour, which may assist in an accepted offer to purchase NAR offers other benefits to a broker-tobroker agreement: a) Memorialize the compensation agreement between brokers, in accordance with the seller’s authorization to the listing broker and the buyer’s agreement with the buyer broker. b) Reduce confusion and misunderstanding of an offer of compensation. c) Provide guidance in the event of a dispute.
NAR Member Resource: Dos and Don'ts When Working with Buyers
Reprinted with permission from the National Association of REALTORS®
The practice changes required by NAR’s settlement must be implemented in good faith NAR opposes any attempt to circumvent the practice changes.
This resource will help you implement the practice changes and empower you to transact business consistent with the settlement, your ethical duties, and in the best interest of consumers. It is meant to provide clarity about business practices allowed under the settlement, as well as those that are not permitted. NAR members should not engage in the practices that are “don’ts” in this guide.
The consequences for failing to abide by the terms of the proposed settlement may be severe including losing your released status under the settlement and losing NAR membership Regardless of your NAR membership status, if you fail to abide by the terms of the settlement, you can lose MLS access or even face possible legal liability.
Below are important dos and don’ts to observe when working with buyers. Please continue to follow facts.realtor for the most up-to-date dos and don’ts and all updates on how to navigate the settlement and practice changes, as well as for resources to help you continue to deliver value to and assist homebuyers and sellers on the homeownership journey.
Dos When Working With a Buyer
✅Clearly and frequently demonstrate your value.
At the outset of the relationship, communicate your unique expertise and experience and explain that one of the core reasons to use a REALTOR®, instead of just a real estate licensee, is that REALTORS® are required to act in the client’s best interest under the REALTOR® Code of Ethics.
Your value includes working to find the buyer a home that meets their distinctive needs Consider sharing this guide about “REALTORS®' Duty to Put Clients’ Interests Above Their Own" with your buyer.
✅Explain what a written buyer agreement is and why the buyer is being asked to sign it.
Explain that this is an agreement outlining the services the agent will provide and what they will be paid for those services.
Explain that the purpose is to ensure buyers are directly involved in the negotiations of the amount their broker is paid
Inform the buyer that obtaining this agreement is a requirement that most MLSs put in place for participating real estate professionals (Note that it could also be a state law requirement consult your state and local laws.)
Be clear that you must have an agreement in place before touring a home with the buyer, and that they should only sign an agreement both the buyer and their agent are comfortable with. See here for a helpful guide on written buyer agreements to share with your buyer.
✅ Before signing the buyer agreement, be transparent about the realities of compensation and potential costs.
Inform the buyer that they can request compensation for their agent from the seller or the seller’s agent, but not all sellers or seller’s agents may choose to pay buyer broker compensation.
Ensure the buyer understands their responsibility for any agreed upon compensation.
Inform the buyer that under current FHA rules, agent compensation cannot be financed through a mortgage.
✅Ensure your buyer understands all options, and advocate for the terms of the offer your buyer needs.
REALTORS® have an ethical and fiduciary duty to serve the best interests of their clients. The settlement explicitly preserves offers of compensation as a choice for consumers because it can mutually benefit buyers and sellers
You can inquire about the existence of such offers and communicate the response to your buyer.
Additionally, even if a seller or their broker is not offering compensation, your buyer can choose to ask the seller to cover the buyer broker cost in the buyer’s offer.
✅Know and follow state and local laws.
There may be additional requirements, including those for certain types of agent representation, based on state law and local practice
Don'ts When Working With a Buyer
❌ Don’t misrepresent anything to a buyer, including the nature and purpose of the written buyer agreement.
Written buyer agreements outline the services the agent will provide and what they will be paid for those services. The purpose and reason for these agreements must be accurately explained and presented to a consumer so that they can make an informed decision on how to proceed. The Code of Ethics requires honest and truthful communications and representations (Article 12); to always protect and promote the interests of their client, and to treat all parties honestly (Article 1); and that all agreements related to a real estate transaction be clear and understandable (Article 9)
While some states legally require buyer agreements, many MLSs now require a written buyer agreement as a result of the NAR settlement and related practice changes, not a new law. Make sure your explanation of the requirement is accurate.
❌ Don’t attempt to “work around” the practice change requirements.
When you agree with a buyer to certain work for a particular amount of compensation, you must do so in good faith.
Any compensation agreed to in the written buyer agreement must be “objectively ascertainable” under the settlement this means compensation must be clearly defined (e.g., $0, X flat fee, X percent, X hourly rate) and not open-ended.
Do not enter into agreements created to get around this requirement. For example, you should not enter into multiple agreements with a buyer at one time for the same services or define compensation as whatever the seller or seller agent is offering as compensation Potential amendments should be considered in the same light you should not amend an agreement for the sole purpose of “matching” an offer of compensation that is greater than what you and your buyer agreed to. Any amendment must have a legal basis and a fully informed buyer that agrees to amend. Consult state contract law.
Remember, the written buyer agreement is a legally binding document that commits you and the buyer.
❌ Don’t accept more compensation than what is provided for in the agreement with your buyer.
Under the NAR proposed settlement, buyer brokers cannot receive compensation for brokerage services from any source that exceeds the amount or rate in the agreement with the buyer.
Do not accept “bonuses” or other compensation from a seller or any other source that is more than what is in your written buyer agreement.
❌ Don’t share your signed buyer agreement with competitors (unless required by state law).
Written buyer agreements contain your compensation and other confidential information that may be material to a transaction and critical to a successful negotiation on behalf of your buyer.
Note that some MLSs may institute auditing programs to ensure compliance with written buyer agreement rules, but those MLSs should keep the written buyer agreement confidential. REALTORS® should fully comply with these requests and local MLS rules. However, some states require disclosing the agreed-upon buyer agent compensation to the listing agent at certain points in the process so please make sure to follow all state laws and regulations.
❌ Don’t limit the properties you show a buyer or steer clients away from properties based on offers of compensation.
Under NAR’s Code of Ethics and MLS policy, steering buyers based on the amount of broker compensation is prohibited.
REALTORS® must inform buyers about any home available that meets their criteria, regardless of whether (or how much) the seller or listing agent is offering compensation
A buyer should be in the driver’s seat with respect to their search and the homes they wish to pursue
Agents should educate buyers on the pros and cons of each option available when looking at and making an offer on a property, including that buyers can ask sellers to pay for buyer broker compensation as part of the offer, even if there is no offer of compensation. Refusing to inform your client of properties because they are being sold by a broker, agent, or seller who is not offering compensation is inconsistent with these principles.
Consult your state and local REALTOR® association for detailed information about state and local law where you operate your business. For more helpful resources, please visit facts.realtor and explore our Consumer Guides series catered directly to home buyers and home sellers.
Continuing Education
May 6, June 3, July 8 8:30 AM - 12:30 PM, $35
Pitfalls May 6, June 3, July 8 1:00 PM - 5:00 PM, $35 8 Hour
April 17, May 20, June 17 8:30 AM - 5:00 PM, $65
Welcome, New Members!
August Little - Premier Agent Network
Cassandra Kawalsingh - RE/MAX Prime
Charles Augustine - Iron Valley Real Estate Hampton Roads
Charles Evans - LPT Realty, LLC, LPT Realty LLC
Dallas Rodriguez - Seaside Realty
Delores White - Atlantic Sotheby's International
Elizabeth Baroody - RE/MAX Alliance
Erica King - eXp Realty LLC
Hannah Tammaro - Iron Valley Real Estate Norfolk
Henley Jackson - Siebert Realty
Karen Lane - Atkinson Realty Atlantic Ave
Kevyn Barnes - Redfin Corporation
Kimberly Maguire - Howard Hanna Real Estate Services
Lauren Dillon - Creed Realty
Levonda Coffey - BHHS RW Towne Volvo Pkwy
Lisa Almond-Winstead - Iron Valley Real Estate Norfolk
