Buyer-broker agreement says 2.5% but the seller is only offering 2. Who covers the gap?

Question

I'm setting up to work with investor buyers once my license clears and I've been reading sample buyer-broker agreements to see what I'd actually be asking someone to sign. The one my broker uses has a blank for the buyer's fee and then a line saying anything the listing side offers gets credited against it. So if I write 2.5% and the seller side is offering 2%, the buyer owes the other half a percent in cash at closing?

Someone in a licensing class said sellers still pay buyer agents most of the time and the whole settlement thing changed nothing in practice. That doesn't match the paperwork in front of me. What's the actual mechanic here, and how do investor clients react to being handed that half-percent bill?

Rena Guide · Accepted Answer

You're reading the paperwork correctly. The buyer-broker agreement sets what the buyer owes their own agent. Anything the listing side offers gets applied against that number, and the buyer covers whatever's left. On a $300,000 purchase, 2.5% is $7,500, a 2% offer covers $6,000, and the buyer brings $1,500.

The part your classmate is half right about: sellers do often still contribute. What changed in August 2024 is that the offer no longer travels through the MLS automatically, so it isn't a given and it isn't advertised the same way. It has to be asked for, deal by deal, usually in the offer itself as a seller concession. Practice varies by state and by brokerage, so confirm how your own broker handles the disclosure and the credit.

Investor clients tend to take that $1,500 differently than a first-time homebuyer does. They're running the acquisition as a business expense against a property that has to produce, so the question they ask is what the $7,500 bought, not whether it feels fair. That's the useful part of the niche for you.

One thing to sort out before your first client: the fee credit can interact with the buyer's loan, because lenders cap seller concessions depending on the loan type and the down payment. A concession that exceeds the cap gets trimmed and the buyer eats the difference in cash. Ask a lender you trust to walk you through the caps for the loan products your clients actually use.

ryanmck27 · Answer

The blank on that form is the part that took me longest to get comfortable with. My broker's version also has a minimum dollar floor, something like "2.5% or $4,000, whichever is greater," which matters a lot if your investor clients are buying $85,000 rentals. 2.5% of $85,000 is $2,125 and you'd be doing the same amount of work as on a $400,000 house.

tonyv88 · Answer

halyard's point about the floor is the whole game in low price point markets. I see the management side of a lot of small rentals and the agents who survive on those are charging flat fees, $3,500 to $5,000, and they say so up front instead of pretending percentage math works at $80k.

angela_burke · Answer

On the reaction question: the investors I deal with negotiate the number once, at the start, and then never mention it again. Consumer buyers relitigate it at closing. That difference is worth more to your calendar than the half percent is.

Buyer-broker agreement says 2.5% but the seller is only offering 2. Who covers the gap?

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