2024 Buyer Representation

How does this impact builder contracts and incentives if we’ve already signed a buyer rep agreement? Can I amend the original buyer representation agreement?

Are Buyer Rep Amendments Allowed??? I checked with eXp Corporate and got this answer, YES, you CAN amend the buyer rep agreement by making changes and initialing on the original one. Just keep in mind that you will be having an uphill battle conversation with a buyer saying, I know we agreed that you would pay me X, but since we are visiting a builder and they are paying more, I want the extra money that this builder is shelling out for myself.

To amend, either:

A) do it right on the original signed form and initial changes or 

B) Use the single property representation agreement form for that builder before showing

Best practice: In your original buyer rep agreement, use language that allows for variable payments for different types. If you discuss these things at the initial appointment, you will be in better shape. You can put a higher number on the agreement and then charge less. You just can’t earn more than the agreed amount.

If you are working across a variety of types break them out. Resale at x, new construction y etc. You absolutely may do that. See example below.

Buyer Broker compensation cannot be open-ended, nor can it be a range.  It must be objectively ascertainable. 

For Example: 

Allowed - “4%”; “$5000”; “3% Resale properties, 4% new construction, and $750 for properties under $50k purchase price”.  

NOT Allowed - “Buyer fee is whatever the Seller is offering”; “Up to $10k”; “1% - 3%; $2500 - $5000.

An example came up, “what if we show the buyer new construction and the builder was paying 3% at the first showing?". Then we go back 2 weeks later and the builder now paying a $5K incentive or 6%.  Can we amend?

“On the go back you absolutely can ammend. Be prepared to negotiate the up-charge with the buyer. Do it prior to showing. Keep in mind this is all new territory and we don’t have any “data” about what will happen if you ammend after the showing. That will likely cause issues, but we don’t know yet.”

If the builder does not already have a buyer-agent commission agreement in their contract, you should get the builder to sign the Direct Compensation from Seller form to ensure that you will receive payment.