Historic changes are happening in the real estate world. As part of the National Association of REALTORs settlement, Exclusive Buyer Brokerage Agreements (or EBBAs) are now being required by Multiple Listing Service (MLS) REALTOR participants. Why would you want to sign one of these and what are the implications to my home purchase in Florida?
In the past, Sellers have compensated both their Listing agents for marketing and sales as well as the Buyer’s agents (or Buyer Brokerage) for procuring a Buyer for the sale of their home. This was normal in most all cases. Qualified Buyers are generally brought to Sellers by their Realtor representing the Buyer, so it is important for the Seller to think about how important the Buyer agent’s role is in the sale of their house.
Over the years, Buyer agents have used EBBAs to solidify their relationships with prospective Buyers. This form hasn’t been a requirement in the past; however, as of August 17, 2024, it is now a requirement that the EBBA form be used prior to showing any Buyer any MLS listing. In the past, not all Buyer agents used this form because Buyers were wary of such a commitment. There are stiff penalties for any REALTOR showing homes to prospective buyers without having an executed agreement.
There are definite benefits to the homebuyer for using the EBBA. For starters you’ll get the agent’s knowledge and experience to assist you among the myriad of things to accomplish while buying real estate. The property you visit is being presented by a listing agent who represents the seller. Why not use that same REALTOR power on your side as a Buyer? Level the playing field so to speak by using the EBBA.
The Florida EBBA is three pages long and describes how much the Buyer agent will be paid, by whom they will be paid, and for what length of time is the agreement, among other things. It also states the obligations of both the Realtor and the Buyer: A Realtor representing a Buyer will:
- work diligently to use their professional knowledge and skills
- discuss property requirements and assist Buyer in locating and viewing suitable properties
- assist Buyer in negotiating, removing contingencies, and closing any resulting transactions
- and cooperate with real estate licensees working with the Seller to complete a transaction.
In return, the Buyer agrees to cooperate exclusively with their Broker/Realtor in accomplishing the objectives.
Buyer’s Broker’s compensation is earned and received when Buyer contracts and closes on the purchase of a home with the assistance of the Broker. The EBBA clearly states how much the buyer agent will be compensated at closing. If the seller doesn’t cover the entire cost of the compensation requested in the EBBA, it is possible for the buyer to pay the difference to the Buyer’s agent at closing. FHA, VA, and Conventional lenders are now allowing Buyer’s Broker compensation be added to their loan so as to eliminate additional out-of-pocket expenses for the Buyer. Either way, the Buyers will clearly know where they stand regarding Buyer’s Broker’s compensation owed if any prior to signing a purchase and sale agreement contract.
This article cannot cover all the angles of an EBBA but just provides an overview. Contact us for more information or for a sample copy of the EBBA in use today. We can help you strategize how to best work your offers when buying your next property. Experience matters! Contact us today so we can offer Buyer Agent services for you tomorrow!
Brian Warner is a Navy veteran REALTOR who has volunteered his time in leadership roles over the years in Central Florida with several organizations. He works with his wife Linda who is an Accredited Buyer Representative (ABR) REALTOR, Senior Real Estate Professional (SRES), Military Relocation Professional (MRP), and are both Gold Key Certified (GKC). Together they have over 34 years of Real Estate experience and own Florida International Real Estate LLC.
Broker commissions are not set by law and are fully negotiable.
