If you've been following real estate news over the past year, you've probably heard a lot about Buyer Representation Agreements, broker compensation, and changes resulting from the National Association of REALTORS® settlement.
Unfortunately, there's also been a lot of misinformation. I've had buyers ask me if they now have to pay tens of thousands of dollars out of pocket just to hire an agent. I've had sellers ask whether they should stop offering compensation to buyer's agents. Others believe commissions are now set by law or that buyer's agents work for free.
None of those assumptions are accurate.
As a California Broker with more than 38 years of experience, I wanted to explain what has actually changed—and just as importantly, what hasn't.
What Changed? Beginning in 2024, California buyers are generally required to sign a Buyer Representation and Broker Compensation Agreement before touring homes with their REALTOR®.
This agreement outlines:
· The services your agent will provide
· The length of the agreement
· How your agent may be compensated
· The maximum amount your broker can receive
The agreement creates transparency from the very beginning so everyone understands how representation works before a home search begins.
What Didn't Change? Here's the biggest misconception. Many people believe buyers are now required to pay their REALTOR® directly.
That is simply not true. Buyer broker compensation has always been negotiable, and it continues to be negotiable today. The new forms did not eliminate compensation. They simply require buyers and their agents to discuss it upfront instead of waiting until an offer is written.
Who Actually Pays the Buyer's Broker? The answer depends on the individual transaction. There is no one-size-fits-all answer.
The buyer's broker may be compensated by:
· The seller
· The buyer
· A combination of both
· Or through another negotiated arrangement allowed by the purchase contract
Everything is negotiable.
My Experience Since These Changes Began. One question I hear almost daily is:
"Are buyers now paying their own agent?" In my personal experience, the answer has been no.
Since these changes were implemented, every one of my transactions has involved the seller paying the buyer's broker compensation.
Every transaction is different, but I have not personally experienced buyers having to pay their REALTOR® out of pocket because sellers have continued offering compensation as part of the overall negotiation.
That's important because many sellers recognize that offering buyer broker compensation helps attract qualified buyers and creates a smoother transaction.
Why Would a Seller Offer Compensation? Think about it from a business perspective.
The more buyers who can comfortably purchase your home, the larger your buyer pool becomes.
When buyer representation is properly compensated, buyers are more likely to have professional guidance throughout the process, reducing misunderstandings and helping transactions reach a successful closing.
Offering compensation is simply another negotiating tool that may help a seller market their property more effectively.
Why Buyers Should Still Have Representation. Buying a home is likely one of the largest financial decisions you'll ever make.
Your REALTOR® helps with:
· Pricing analysis
· Negotiating terms
· Explaining disclosures
· Reviewing inspections
· Coordinating timelines
· Protecting your interests throughout escrow
Having professional representation can help buyers avoid costly mistakes that often far exceed the cost of representation itself.
Does This Increase Home Prices? Not necessarily. Compensation has always been part of the overall negotiation between buyers and sellers. The market ultimately determines value—not how commissions are structured. Today's market conditions, inventory levels, interest rates, and competition continue to have a much greater influence on home prices.
What Sellers Should Know. If you're planning to sell your home, don't assume you should stop offering buyer broker compensation simply because you've heard about these industry changes. Every property, neighborhood, and market is different.
Sometimes offering compensation can make your home more attractive to qualified buyers.
Sometimes another strategy may make more sense. This is why it's important to discuss your goals with an experienced REALTOR® who understands today's marketplace.
The Bottom Line. The biggest change isn't that buyers now have to pay their agent.
The biggest change is transparency. Everyone now has a conversation about representation and compensation at the beginning of the relationship instead of halfway through the transaction. That's actually a positive change.
The key takeaway is this:
Buyer broker compensation is still negotiable.
Every transaction is negotiable.
Every buyer and seller deserves to understand their options before making decisions based on headlines or social media rumors.
If you're thinking about buying or selling a home in San Diego County and have questions about these new requirements, I'd be happy to walk you through the process and explain exactly how it works.
Knowledge is powerful—and in real estate, informed decisions lead to better outcomes.
About Minnie Rzeslawski
Minnie Rzeslawski is a Broker Associate with RE/MAX City Real Estate and Broker/Owner of The 24K Real Estate Group. With 38 years of experience serving buyers and sellers throughout San Diego County, she specializes in residential real estate, probate sales, trust sales, first-time homebuyers, and strategic home marketing. Minnie is committed to educating her clients so they can make confident real estate decisions.
