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Why You Should Tell Clients How You’re Compensated

The real estate industry is facing lawsuits over how buyer’s agents are compensated, which means it remains critical that you have transparent conversations with your clients upfront about the commission structure. If you need pointers on how to have the conversation, the Real Estate Buyer’s Agent Council’s (REBAC) ABR® designation course includes a section on this as well as education on recent updates to MLS rules and the REALTOR® Code of Ethics that impact your practice. The course also covers how using a buyer’s rep agreement is essential and helps naturally facilitate these discussions.

How to Talk About Compensation With Clients

Use a buyer representation agreement.

This helps you and your buyer establish compensation from the start. The agreement provides the circumstances under which you’ll get paid, how much and by whom. There are different structures of compensation available to buyer’s representatives; your office policy likely will dictate your choice (e.g. percentage of sales price, flat fee or retainer fee).

Disclose any extras.

Sometimes, compensation for the buyer’s agent might exceed what’s allocated in the buyer rep agreement, such as when the seller or listing office offers a bonus for the sale of a property. In that case, a buyer rep agreement should be written to disclose any bonus or additional percentage of commission that would be received. The ABR® course also provides examples of how this issue can be addressed, such as reflecting a range of buyer rep compensation in the agreement to account for these situations.

Stay updated on changes.

Check out, an NAR website offering infographics, articles and FAQs to help REALTORS® have conversations with consumers about commissions and the services they provide, as well as to show how local broker marketplaces, or MLS, are pro-consumer and provide home buyers and home sellers the most up-to-date, accurate property information and unprecedented access for all. Here, you can also find the latest information about the pending lawsuits. REALTORS® are encouraged to use the information and resources provided to facilitate these important conversations between real estate professionals and home buyers and sellers.

September 14, 2022. Realtor Magazine. Why You Should Tell Clients How You’re Compensated.

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