Working with a Silicon Valley Buyer Agent

If you’re considering buying a home, recent changes in real estate commission practices have likely raised some questions about working with a buyer’s agent. For over 21 years, I’ve helped buyers through the process of finding, negotiating, and closing on homes, and I’m here to guide you through this new system as well. Reading this article will help you understand how I work with buyers in this “new era” of buyer brokerage in Silicon Valley.

How Buyer’s Agents Worked “in the olden days”

Before August 2024, working with a buyer’s agent was simpler and largely informal. Here’s how it used to work:

Meeting Buyers: Whether through open houses, referrals, or website leads, I’d meet prospective buyers and begin helping them find homes.
Compensation Structure: Buyer’s agents, including myself, were compensated by the seller’s side through a “blanket offer of compensation.” Sellers would list their homes on the MLS (Multiple Listing Service) and offer a commission to any buyer’s agent whose client successfully purchased the property.
No Formal Agreement Needed: Since buyer’s agents were compensated automatically by sellers, we rarely required formal agreements. This informal structure, however, left agents at risk of working without guaranteed payment if a buyer chose another agent.

What Changed in August 2024

The Sitzer/Burnett lawsuit in Missouri brought about a significant change: the National Association of Realtors (NAR) and associated MLS systems can no longer require sellers to offer compensation to buyer’s agents. Now, buyers and their agents must establish compensation agreements independently, leading to the introduction of two important forms in the process:

Buyer Representation and Brokerage Compensation (BRBC) Form: This form formalizes the buyer-agent relationship, specifying commission terms and scope, such as geographic area or type of property, for a defined period (usually up to 90 days). This agreement outlines how much the buyer’s agent will be compensated and who is responsible for paying it—by default this is the responsibility of the buyer, unless shifted to the seller in the buyer’s purchase offer.
Property Showing Representation Agreement (PSRA): If you’re not ready to commit to a full BRBC agreement but want to tour specific properties, the PSRA is a lightweight alternative. This form applies to specific properties and provides limited-duration representation for showings, with compensation terms in place only if an offer is made on those properties.

These forms ensure transparency, helping buyers understand compensation details upfront.

Current Buyer-Agent Compensation Structure: Shifting Costs to the Seller

In today’s market, most buyers prefer to shift commission costs to the seller, and this is typically manageable through strategic negotiations. Here’s how it works:

Specifying Compensation in Offers: When making an offer, I’ll include terms requesting that the seller cover the buyer-agent commission. For instance, if the BRBC form stipulates a 3% commission, I’ll negotiate with the seller to incorporate that cost in the offer.
Seller Responses: Generally, sellers are open to this arrangement, as their primary concern is the net amount they receive. If they wish to counter the offer, they may adjust the purchase price accordingly. The key is to ensure your needs as a buyer are met without additional out-of-pocket expenses.

This new transparency benefits both parties, allowing buyers and sellers to see the commission structure clearly. Nothing gets swept under the rug.

Why a Buyer’s Agent Is Valuable, Especially in the Bay Area

With the Bay Area’s competitive market, having a buyer’s agent can be a tremendous advantage. My role is to:

Identify Quality Properties: With a trained eye for property value and market trends, I help you discern high-quality properties and guide you on which listings may be worth the investment.
Assist in Multiple Offer Situations: The Bay Area market can be fierce, with multiple buyers competing for properties. I help you submit strong, competitive offers while prioritizing your budget and preferences.
Guide You Through Complexities: Negotiating, handling paperwork, and navigating inspections require experience. My role is to simplify these processes for you and safeguard your interests every step of the way.

Addressing the New Forms with My Clients

Transparency and choice are essential. Here’s how we can approach these forms together:

Start with a PSRA: If you’re just beginning your home search, I recommend starting with the PSRA. This allows you to explore a few properties with me, giving you a sense of my approach without the commitment of a full BRBC form.
Move to a Non-Exclusive BRBC: Once you’re ready to move forward, we’ll sign a non-exclusive BRBC. This ensures my compensation and clarifies the geographic and property criteria we’re focusing on, while still allowing you flexibility.

The non-exclusive BRBC aligns with my approach of keeping options open, which has been successful throughout my career.

What If the Seller Declines to Cover the Commission?

It’s rare for sellers to outright refuse commission payment, but it’s essential to understand the options if this occurs:

Negotiating Options: If a seller resists, we may still reach an agreement through price adjustments or closing cost credits.
Freedom to Walk Away: Ultimately, if a deal doesn’t benefit both parties, you’re not obligated to continue. I only work in situations where both sides find the terms agreeable, ensuring mutual benefit.

The Benefits of Working with an Experienced Buyer’s Agent

Changes in real estate practices have made the buying process more complex, but working with an experienced agent can make it easier:

Knowledge of Market Dynamics: I’ve been working in this market for over 21 years and understand local trends, neighborhoods, and property values.
Tailored Guidance: Every buyer has unique needs. I provide tailored advice based on your goals, from property recommendations to offer strategies.
Comprehensive Support: From property tours to final negotiations, I handle every detail, ensuring your buying experience is smooth and informed.

While these new forms may seem complex, they’re simply tools to clarify the buying process and ensure everyone’s interests are protected.

Ready to Explore Your Options?

Navigating the Bay Area real estate market is more than just finding a property—it’s about making strategic decisions that serve your long-term goals. With these new protocols, transparency is front and center, making it even easier to understand the buying process. If you’re considering buying, let’s have a conversation. We’ll discuss your goals, explore properties, and work out the approach that’s best for you in today’s changing market.

Contact me today, and let’s get started on finding your next home with confidence.