Guide to the 2024 Buyer’s Representation Agreement Las Vegas

A mandatory buyer’s representation agreement Las Vegas between a real estate agent and a potential homebuyer to be signed before even visiting homes went into effect on August 17, 2024, as part of the settlement among NAR, the National Association of Realtors, and the Department of Justice. This is a significant change in the practice of real estate representation for potential buyers, so here is a detailed explanation of the document to use in Southern Nevada, particularly the Las Vegas area.

Transcription of the video

Finally, you have decided to buy your home now that it’s imminent that the Federal Reserve will cut interest rates! Congratulations! Buying your home is the best decision you can make for your financial security and your family. At the same time, you must be well informed about how the new buyer’s agent commission system works.

This is a new system, totally novel for everyone, no doubt, but don’t worry; it’s a system that allows you to get even more involved in all the details of the transaction, including, of course, negotiating with your agent regarding their commission. At the same time, the system allows the seller of the house to acknowledge your agent’s commission and make some other concessions.

Here, I’ll explain what this new system consists of, the contents of the new contract, and what it means for you.

Why the need for a buyer to sign a buyer’s representation agreement

Before getting into the details about the new system for the buyer’s agent commission, let’s consider what motivates this change.
When a seller was interested in offering their home to the market, they would contact their agent.

After sharing some details about the market and the property, they would discuss the services provided by the agent in representing the seller and agree on a percentage of the home’s sale price. Usually, it was 5% or 6%, and part of that percentage was offered to the buyer’s agent through the Multiple Listing Service, known as the MLS, to be paid at the time of the home sale closing.

Very well. What happened? Some sellers nationwide disagreed with this procedure and sued the National Association of Realtors, known by the acronym NAR, and other real estate companies. The association then agreed with the Department of Justice, and the new system we are discussing today is the development of that agreement, which establishes a complete separation of seller and buyer commissions.

The seller negotiates with their agent the commission for the sale, and the buyer negotiates with their agent the commission for the purchase, knowing that each commission is entirely negotiable! It is prohibited to make any offer of compensation for real estate services public through the MLS. Buyers must sign a contract with their agent specifying the terms related to the representation services for the purchase.

In Southern Nevada, our Las Vegas Realtors Association, LVR, has designed the contract, which requires us to discuss and negotiate it with our home-buying clients starting on August 17, 2024, even before visiting homes.

The Buyer’s Representation Agreement Las Vegas

Here it is:

It is a 3-page document known as the Buyer Brokerage Representation Agreement, abbreviated as BBRA, and here we will call it the “Buyer Contract.”

It applies to in-person or virtual visits.

You do not need to sign the buyer’s representation Agreement Las Vegas when you speak with an agent at an “open house” or ask an agent questions about real estate activity or their representation services.

Now, look at the document, which consists of 14 clauses. The first thing we see is that it gives the option to make the contract exclusive or non-exclusive. An exclusive agreement means you are not working with another agent. A non-exclusive agreement means you work with different agents for specific matters, such as visiting properties in a particular neighborhood during a specific period, reviewing and/or preparing documents, and hiring some “à la carte” services.
You must be careful not to contract with two or more agents simultaneously and for the same property, as this can cause legal issues and, eventually, additional commission payments.

1 – Properties. 

This is the space to include all the available information about the property you are looking for, residential, land lot, new home, etc., in which cities or neighborhoods, as well as more detailed information such as when you know the address and/or the parcel number in the County.

2 – Contract Duration.

 It specifies the start date and the expiration date.

3 – Agent Payments 

Remember: The compensation for representation services for purchasing your home is entirely negotiable and paid at the transaction’s closing. You can negotiate with your agent regarding a percentage of the purchase price, a fixed sum of money, and even an hourly payment.
Whatever the agreement with your agent, you must know that at the transaction’s closing, the agent cannot receive any amount that exceeds the agreed value in the contract you both signed.

4 – Receiving Payments from the Seller

This is very important! The new system allows the seller to cover all or part of your agent’s commission and offer other concessions, such as paying the closing costs on your behalf as the buyer. When making an offer to purchase the home, you must specify with your agent the terms under which you will exercise these options at your convenience. You remain responsible for the difference if the buyer accepts only a partial commission payment.

5 – Facts You Should Know 

In a particular situation, you may need to purchase the property of your interest through the seller’s agent, who will represent both the seller and the buyer. The agent must present you with a form known as Consent to Act, which must be signed by all parties. You also acknowledge that other buyers represented by the agent may eventually be interested in the same property or similar ones.

6 – Agent Management 

The agent must provide you with all necessary information and use their skills to achieve the ultimate goal of purchasing your home, all guided by ethical principles and good faith.

7 – Buyer Responsibilities

 It is reiterated that it is advisable for you to sign an exclusive purchase contract, and it lists your responsibilities, guided by good faith in purchasing a home, such as providing the required documentation and acting diligently in activities that require your participation and presence.

8 -For a Better Experience 

It warns that builders and some independent sellers do not pay the agent’s commission unless the buyer and their agent have visited the new project or property together for the first time. So keep this in mind because you remain responsible for the commission agreed upon in this contract.

9 – Equal Housing Opportunities

 It reiterates the practice of non-discrimination in housing.

10 – Wire Fraud

 It warns to take all precautions when making a wire transfer, due to the increasing electronic fraud.

11 – Nevada Law

 This contract is governed by the law of the state of Nevada.

12 – Legal Capacity of the Buyer 

The buyer and/or buyers acknowledge their legal competence to sign this contract.

13 – Additional Terms

14 – Cancellation / Signatures

As you can see, although you must sign a contract with your agent from the beginning of the purchase process, the system authorizes the seller to pay your agent’s commission as a result of the negotiation process initiated with a purchase offer for the home you are interested in.

This new system is an excellent opportunity for you to get even more involved in the details of the purchase you are going to make, which is why it is so crucial that you work as a team with the agent you have chosen to represent your interests. Negotiation and communication skills are essential in this process.

Feel comfortable signing this contract because remember that it is COMPLETELY NEGOTIABLE and, like any contract, it can be modified with prior agreement between the parties. If you have more questions, your agent should answer them.

Exercise your power as a buyer and keep your goal of becoming a homeowner in the Las Vegas area!

I hope I have succeeded in my purpose of spreading the word about this new procedure! Share it with family and friends!

For more information, you can visit the National Association of Realtors. https://www.nar.realtor/the-facts/homebuyers-what-the-nar-settlement-means and Las Vegas Realtors Association, LVR

Happy home buying! 

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Note: After the video ” The New Buyer’s Representation Agreement Explained—Las Vegas 2024 ” was published, the Federal Reserve finally cut the interest rate by half of a percentile, 0.50%, on September 18, 2024. The new benchmark is 4.75%—5.00%, which will also lower mortgage interest rates, bringing some relief to potential buyers. It is expected that with more favorable mortgage interest rates, more potential buyers will start negotiating with their agents the details of representation services and the remuneration to the buyer’s agent.

The buyer representation agreement has become a central aspect of the conversation between the potential buyer and their agent in the buyer consultation meeting, which occurs at the beginning of the home-buying process.

Summary

The buyer’s representation agreement Las Vegas has been in effect since August 17, 2024, and all parties are adjusting smoothly to the new standard of representation.

• Decoupling of the commission for agents representation. 
• No sharing of information on the MLS about commissions 
• The seller can offer to pay the buyer’s agent commission through the negotiation process and offer other concessions to the buyer. 

For more details about the NAR Settlement, visit the National Association of Realtors and Las Vegas Association of Realtors

Discussing the buyer’s representation agreement Las Vegas with your Realtor is now the “bone” of the buyer consultation, as this meeting covers all representation services and remuneration aspects.  

Properties are selling as usual in a market characterized by high demand despite high prices and interest rates. So far, there is no reliable information about how buyers have perceived the change, but in general, what is happening is that buyers are now more involved in every step of the buying process.  

Do you have any questions about this topic, or would you like to schedule a free buyer’s consultation?  Please contact me and feel free to leave your comments!