BIC TIP #1193: Buyer Agents Need to Get Paid
Here is a question Stephen Long, The Notorious BIC, hears often: “The seller is not offering any compensation to a buyer’s agent, and my buyer does not want to pay me out of pocket. How do I handle that on paper?” The good news is that buyer agents need to get paid, and there is a clean way to include your compensation in the offer.
The Statutes Now Allow It
According to Stephen, the general statutes have been revised so that a buyer’s agent can now include compensation in the Offer to Purchase and Contract (Form 2T). That means the buyer can ask the seller to cover the buyer agent’s fee as part of the deal, and the seller can agree to it in the contract itself.
This gives buyers a way to negotiate that cost into the transaction rather than writing a separate check at closing.
Attach the Form 220 as an Addendum
Stephen’s recommended approach is to attach the Form 220, the Agreement for Compensation, to the Offer to Purchase and Contract as an addendum.
Making it an addendum ties the two documents together. Neither the Form 220 nor the contract is in effect or enforceable without the other. The seller is not agreeing to a house sale and then, separately, considering whether to pay you. It is one package, and the compensation terms travel with the contract.
Changes on the Horizon
Stephen expects contract revisions to arrive in July that will likely accommodate compensation more directly and may make the addendum approach unnecessary. Until those updated forms are released and in use, the addendum method is a reliable way to get your compensation in writing.
As always, be sure your buyer agency agreement is in place, that it addresses how you are to be paid, and that your client understands what is being requested in the offer. If you have questions about a specific situation, check with your broker-in-charge.
The Practical Takeaway
When a seller is not offering buyer agent compensation, you do not have to walk away from getting paid. Attach the Form 220 to the offer as an addendum so your compensation becomes part of the contract. Watch for the updated forms in July, and keep your paperwork tight in the meantime.
