How to Negotiate Your Fees as a Buyer’s Agent Post-NAR Settlement


The 2024 NAR settlement completely upended the way buyer’s agents are paid. For nearly a century, buyer’s agents were paid a percentage of the listing agent’s commission (typically 50%). Buyers didn’t have to pay their own agent out of pocket because, as we all know, buyers already have a major financial hurdle to overcome between the down payment, closing costs, moving expenses, and possible renovation costs. 

Post-settlement, buyer’s agents aren’t given a share of the listing agent’s commission. Instead, you have to negotiate your fees with your buyers. And this post will give you some tips on how to negotiate effectively. 

How to Negotiate Your Buyer’s Agent Compensation


1. Understand the Settlement Terms


Technically, the NAR settlement terms only apply to the REALTORS represented in the settlement. But, in practice, all licensed agents and brokers will feel the impact because local MLSs have changed their systems to accommodate the changes.

So you need to understand the terms of the settlement to make sure you’re operating ethically and legally.   

The basics:

  • Sellers can’t pay the buyer’s agent directly or through their listing agent, but they can give the buyers a concession, which can be used to cover their agent’s fees.

  • Listing agents can’t publish a buyer’s agent commission split on the MLS, but they can promote the seller’s willingness to offer a concession on other sources, like their websites.  

  • Buyer’s agents must negotiate a specific fee amount with their buyers (like a flat fee or a percentage of the purchase price). This must be documented in the Representation Agreement and signed by both parties before showings can begin. The buyer’s agent cannot earn more than this amount from this buyer, even if the seller is willing to offer a higher concession. 

2. Demonstrate Value


Since you have to negotiate your fee with buyers, you have to show them what you bring to the table and why you’re worth the big bucks! Here’s how:

  • Highlight your differentiator. Clearly articulate what makes you a better choice than every other agent in the market. This might include your experience, local market knowledge, negotiation skills, or services.

  • Share success stories. Have your previous clients write or record a testimonial explaining how you helped them save money, get an offer accepted, or navigate a complex deal.

  • Find unique properties - before they hit the market. With Gatsby Investment, real estate agents can view active and pre-market listings. Our projects are either recently renovated or newly constructed and move-in ready. Even better, we have small multi-family developments available for your investor clients! Our 4-6 unit multi-family buildings are ideal for your investors who want to grow their portfolios without adding more units than they can financially or operationally support. 

  • Provide real value before representing your clients. Stand out by giving value to future clients long before you sign them. You can send housing market reports to locals, host free first-time buyer seminars for renters, or provide complimentary property tax reviews for homeowners (which also gives you a chance to create a separate stream of income through property tax appeals!). 

3. Offer Flexible Commission Structures


We’re all in favor of charging what you’re worth. If you’re an experienced agent worth 2.5%-3% of the purchase price, command that rate!

But this compensation structure change gives newer agents a unique opportunity to compete on price. Consider offering flat fees or variable rates (like a tiered commission structure based on the sale price or the level of service provided). You could even offer payment plans if you wanted!

Offering lower fees than your competitors means leaving money on the table for your first few deals. But it also gives you a chance to get those critical first deals under your belt.

4. Be Transparent


Provide a clear breakdown of your fees and what they cover. Educate your buyers on how you will be working to justify the fee. Set reasonable expectations upfront. Then exceed them.

Be honest about the seller’s potential role in covering your fees. Let your buyers know that they can request a concession to cover your fees when they write an offer to purchase a house. But also let them know that the seller does not have to grant the request. And, of course, sellers may prefer offers without a concession request. Perhaps your seller should offer a higher price in exchange for the concession. After all, that extra amount spread over a 30-year mortgage may be nominal. 

5. Script Your Buyer Presentation and Rehearse 


You’re probably familiar with scripting. You likely have a listing presentation script as well as scripted responses to common buyer and seller objections. Negotiating your commission requires the same forethought. 

Prepare and rehearse your buyer’s presentation until it feels natural and spontaneous. As you do so, keep the following in mind:

  • Use data to support your compensation. Gather MLS data on the percentage of buyers who use an agent and (if possible) their outcomes compared to those without representation. 

  • Get ahead of common objections. Be prepared to address questions like Why do I have to pay for your services when I can find a home myself? and Will you take a lower fee? Work those into your presentation to show that you understand the buyer’s POV. 

  • Practice insightful questioning and active listening. If a buyer balks at your fees, listen for their real concern. Are they really afraid you’re not worth the rate? Or are they just concerned that they don’t have the money to pay you? 

Gain a Repeat Buyer Client with Gatsby Investment


Gatsby Investment is always interested in partnering with Los Angeles-based real estate agents and brokers to find our next property. 

We’re currently looking for vacant lots, distressed homes, and distressed multi-family buildings. Please review our specific criteria and submit potential properties for our consideration.

We’d love to be your next buyer client. And, because we regularly buy and sell properties, we could provide you with repeat business if you find us the right deals!

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Gatsby Investment’s Performance

Since the start of the company in 2016, Gatsby has acquired over 85 deals. As of December 1, 2024, 54 of those offerings have been completed. This makes Gatsby Investment the leading real estate syndication company in Los Angeles. View completed deals.
Trusted Members
19k+
Average annualized net return from 2017–2024
22%
Acquired Deals
85
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