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The process of buying and selling a property in Florida underwent a major transformation with the entry into force of the new law as a result of the antitrust (Antitrust Lawsuit) lawsuits filed against the NAR (National Association of Realtors) in the US.
The change shook the American real estate market and will require an adaptation effort on the part of the professionals involved, buyers and sellers. Here at AMG International Realty, we understand that the law, despite introducing some bureaucracy and changing a long-standing pattern, brought light to the process and also more transparency to operations.
The new law brought changes in responsibilities on the payment of commissions to the agents involved in the intermediation of the property, and also adopted stricter standards, with the mandatory introduction of the so-called Buyer’s Agreement, that is, a Term of Commitment.
In this article we will explain what the Buyer’s Agreement is, what it is for, and its implications.
What is the Buyer’s Agreement?
The document ‘Buyer’s Agreement’, is a Term of Commitment signed between the customer who intends to buy a property and the broker who will represent them in this process.
It is, in fact, a representation contract between the parties where terms and conditions of this partnership between buyer and broker are defined. It must state how the remuneration will be given to the broker, the term of the representation, among other details. Click here to download the AMG International Realty Buyer’s Agreement.
With the entry into force of the new law, the Buyer’s Agreement became mandatory and exclusive.
By signing the contract, the property buyer agrees to work with the real estate broker until he buys a property proposed by the broker or until the contract expires. If a real estate transaction occurs, the real estate broker receives a commission based on the sale price of the property.
According to the new law, the Buyer’s Agreement must be signed before the “tour” of the properties, that is, the first visit.
Who pays the Buyer Agent’s commission?
In Florida, traditionally, a real estate purchase and sale intermediation is represented by a Buyer Agent and a Seller Agent. The latter is the holder of the ‘listing’, that is, the exclusivity of the sale of the property, and represents the owner (seller).
Before the new law, the person who paid the total commission on the purchase and sale operation of the property was the owner (seller). At the time of the transfer of the deed, a phase known as “closing” (closure), the amount of the commission was deducted from the final sale price of the property and divided between the buying agent and the selling agent.
What happens from now on is that the owner (seller) is no longer responsible for paying the buyer’s commission. The Buyer Agent’s remuneration may, from now on, be negotiated and paid by both the buyer and the seller.
In practice, nothing changes, the broker’s commission is always negotiable. The only difference is that, before the law, the buyer did not need to pay the commission directly. The buyer paid, indirectly, at the time of closing, deducting the commission from the total value of the sale of the property.
In the article New Law: How the broker’s commission will be paid in Florida we explain how the new process works and exemplify.
About AMG International Realty
AMG International Realty is a global real estate agency specialized in Florida and aimed at the foreign public. If you want to know more about the new real estate market law in the US and also details about the real estate purchase process in Florida, contact me right now and chat with me on WhatsApp: +1 305 761 2655 (Heloiza Arazi).
