Understanding Commission, Buyer Broker Agreements, and What It Means for Homebuyers and Sellers in Florida
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Hello, everyone! I’m Robyn Cavallaro, a Realtor here in The Villages, Florida. Today, I’m updating you on the important topics of commissions, the buyer broker agreement, and how recent changes affect buyers and sellers.
Start With the Right Tools
Before diving into the specifics, I recommend picking up my Home Buying Journal, available on Amazon (<- click there to order it). This journal includes:
Checklists
Sections to organize listings and notes
Renovation notes
Budget tracking
It’s printed, easy to use, and helps you stay organized throughout your home buying journey.
Let's Dive In: Buyer Broker Agreements and Commissions
Why Are We Talking About This Now?
There has been a lot of discussion recently about commissions and buyer broker agreements due to a major lawsuit that reshaped real estate practices. Even though commissions were always negotiable, things are now more openly structured and disclosed.
1. Seller's Commission Responsibilities
When a homeowner lists a property:
They negotiate the listing agent’s commission.
They choose whether to offer a commission to the buyer’s agent.
Offering compensation to a buyer’s agent is still a common practice. It’s seen as a cost of selling the home because it motivates agents to bring qualified buyers.
Robin's insight:
I have a large network of buyers (over 2,000 search my site), so sellers who work with me get access to serious buyers.
Offering buyer agent compensation helps the seller by:
Attracting more buyers
Incentivizing agents to bring offers
2. Negotiations Around Commissions
While most deals still offer commissions, there have been a few unusual cases where:
Sellers offer less commission than expected.
Buyer's agents must decide whether they accept less or ask the buyer to cover the gap.
Example:
A seller offered 2% commission.
A buyer’s agent from the area demanded a 3% commission.
I stood firm, and they stuck with 2% and closed the deal, preventing the buyer from losing the opportunity over an unnecessary demand.
In some cases:
The buyer may cover the difference.
The price of the house might be adjusted to cover the agent’s fee if necessary.
Important:
Most Realtors are professional and easy to work with—outlier situations like the above are rare but worth understanding.
3. What Happens If the Seller Offers No Commission?
If the seller offers zero commission:
In my opinion, the seller’s net proceeds are still the same whether they pay commission or not.
Simple Example:
Sell at $400,000, pay $10,000 commission → seller nets $390,000.
Listed at $400,000 with no commission offered, a full-price offer is expected at $390,000.
Thus, it usually balances out, and the seller doesn't necessarily "save" money by refusing to pay a commission.
4. Buyer Broker Agreement: What Is It?
When working with buyers, Realtors now require a signed Buyer Broker Agreement before taking clients on tours, whether physical or video. This is to:
Formalize the relationship
Clarify duties for both the agent and buyer.
Specify a commission agreement.
Outline the time frame of representation.
Key Points about the Buyer Broker Agreement:
Negotiable timeframes (one day, one week, a month—it’s up to you)
Specifies the commission rate the agent expects
If the seller's commission offer is less than agreed, a modification can be made (to adjust expectations or fees)
Protects both parties legally
5. Buyers Should Not Fear the Agreement
Robin emphasized:
Don't be afraid to sign a buyer broker agreement.
It can be customized to your needs.
It ensures your agent is working for you, not just showing homes casually.
If you're serious about buying, having a formal agreement ensures you get dedicated service and protection.
6. How I Handle Commission Gaps
Robin’s process:
When a buyer shows interest in a home, I check if the seller is offering compensation.
If compensation is lower than agreed, my buyer and I decide:
Modify the agreement
The buyer covers the difference.
Negotiate accordingly
The goal is to create a fair offer that works for both the buyer and the seller.
Summary: What Buyers and Sellers Need to Know
Final Tips
Sellers are still offering commissions in most cases.
Commissions are negotiable.
Buyer Broker Agreements protect you and clarify expectations.
Don't stress—your Realtor will help you navigate all of this.
Thinking About Buying or Selling Your Home?
I’m here to help. Feel free to text or email me anytime. I’m Robin Cavallaro, a licensed Realtor—and I am here to help you buy or sell a home in The Villages, Florida.
Thank you for joining this episode—until next time!
If you are looking for a home to rent here in The Villages, Florida Clara’s Cottage located in The Village of McClure is now accepting guest reservations.
