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A Reader's question about the status, loyalty, and compensation of a Realtor® with whom she had met . . .


Ileana Caporale said:

"The Realtor® says that he works for me but is going to get paid by the seller?  Is that right?  I am not sure if he is going to negotiate on my behalf or the seller's.  Please let me know if this is correct!  This is the first time I am going to buy, and this process is so complicated, too many things to be aware of!  Thank you."

Ileana.



Richard Hamlin replied:

When I visited the headquarters of the National Association of Realtors® in Chicago in 1996, I met with a vice president of the association to personally get the answers to a number of questions, including the one you ask here.  You can actually see me at the NAR headquarters in this photo. 
Richard Hamlin at the headquarters of the National Association of Realtors®, in Chicago

I was told by the National Association's attorney that "compensation does not determine agency", which was explained as follows: No matter the source of the real estate commission to be paid to the buyer broker — whether it be from the buyer client, the seller customer, or anyone else . . . or even partly from each of several parties — the source of the buyer broker's compensation does not obligate the buyer broker in any way to the seller, or to anyone other than the buyer client.


For the buyer to be a buyer client, and not merely a customer, there must be a Buyer Broker Employment Agreement signed by the buyer and by the buyer broker, and that agreement must have a compensation clause that specifies how the broker will be paid. While the buyer client has the obligation to pay the broker so employed, an experienced Realtor® knows how to get the seller to directly or indirectly pay the fee from the transaction's proceeds.


The answers I received at NAR exactly matched the procedures I had established in my buyer brokerage years before, but the confirmation was understandably gratifying.


Another question I had answered in Chicago was, "Can a property listing omit or decline to pay a commission to a buyer broker?" The answer was,  "A listing is an offer of cooperation to other Realtors®, and you cannot have an offer of cooperation without an offer of compensation to the selling broker!"


However, the offer of compensation to the selling broker may be equal to, higher, or lower than the agreed broker compensation specified in the buyer's employment agreement. Therefore, there may be a difference that can result in a debit or credit to the buyer. Our company policy covers all possibilities in such a way that our buyer clients virtually never have to pay a cent more for exercising their absolute right to exclusive Realtor® representation than they would if they had allowed themselves to be a selling broker's customer. I always explain this in detail at our initial no-obligations meeting.


Ileana, your Realtor® only works for you if you have signed such a buyer broker employment agreement with that Realtor®. Without such an agreement, you are just a customer entitled only to the agent's honesty and nothing else, and the Realtor® is either an agent or sub agent of the seller, or, as is possible in your case, unemployed and therefore un-entitled to compensation, in Connecticut.


I hope this is helpful.


Richard Hamlin, C.B.A.®, e-PRO®
Richard Hamlin Real Estate, Inc.
PO Box 3131, Stamford CT 06905-0131
info@RichardHamlin.com
Tel: (203) 276-9330

Richard Hamlin, REALTOR®, E-pro®, C.B.A.®
Stamford, Connecticut 06905-0131
Exclusively representing home buyers throughout the 23 towns and cities of Fairfield County, Connecticut

If you would like some real estate help, contact us by e-mail,

or by phone: 203-276-9330

Your Neighborhood Realtor® Since 1973

Any sample listings displayed on this site are the listings of other MLS agencies, as we neither seek nor accept property listings.  While MLS  information is presumed accurate, we make no representations about other agencies' accuracy or timeliness of their details.  As Exclusive Buyer Brokers, we only represent our own home buyer clients, and we never represent sellers or their listing agents, thereby avoiding the huge conflicts of interest inherent in the vast majority of real estate firms that attempt to represent all parties in the same transaction. 
Nothing in this website is intended to be a solicitation of or advice to home buyer clients of other Realtors®.
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