6 Ways for Home Buyers to Cover Their Newly Required Agent Fees

At Restate, we've discussed and come up with 6 ways to help you support your buyers to cover the buyer agent fees.

A quick background reminder, although agent fees are always negotiable, 3/15/2024 NAR ruling really changed the landscape, arguably putting first time homebuyers in to the most difficult situation, because in addition to the down payment and they potentially need to pay a 2-3% of house value for their agent fees. 

The question arises: How can homebuyers afford to pay 2-3% of the home's price to their agent? For many, this additional expense may be prohibitive.

1. Negotiate Agent Fees: because buyer agent fees are out-of-pocket expenses now, buyers cannot roll it in their mortgages, so for some transactions, the best path forward might be seller offering concessions to pay for the buyer agent fees, just like the old days, I guess. 

2. Gift Funds: Funds traditionally earmarked for down payments and closing costs could potentially be redirected to cover the buyer's agent commission. Just make sure it's seasoned or explained.

3. Watch Out for New Loan Programs: Because it's a nationwide change, we expect lending agencies may introduce innovative solutions, such as allowing agent commission costs to be rolled into loans in the future, particularly with programs like FHA, VA, and USDA.

4. Save More, Of Course. Prospective homebuyers should consider setting aside an extra 1% to 2% of the home's price to cover agent commissions, providing a buffer for unforeseen homeownership expenses.

5. Engage a Real Estate Attorney: Some buyers might opt for the services of a real estate attorney for a flat fee, though they may not provide the comprehensive support of a traditional agent, because they usually just review purchase and title docs. 

6. Hire a Flat Fee Agent: For some situations, it might make sense for buyers to work with a flat fee agent. It's definitely not ideal for everyone, but it provides a tiered pricing option for a matching tiered service.   

Because we know first-time homebuyers could get negative impacted from this ruling. Loan Officers who can fill the gap with first time home buyer education can really win the hearts of their buyers.