Buyer Broker Compensation in the the Listing Agreement explained (NVAR Contracts)

This is for the NVAR Listing Agreement Addendum called the Optional Buyers Broker Compensation form. WATCH THE VIDEO AS YOU READ THIS ARTICLE! IT'S A TRANSCRIPT.

Please explain the two choices on the compensation this one keeps on coming up. So before we get into the two options on the listing addendum, I want to go back to the listing agreement on paragraph seven, optional seller paid buyers broker compensation.

Alright, so you have two boxes. The seller authorizes or does not authorize the broker to disclose to prospective buyers and brokers representing buyers of what? What am I disclosing? What are you authorizing me of? The seller's willingness. To negotiate with buyer regarding seller's payment of buyer's broker compensation.

So it starts here. If they check, yes, authorize, then you go to the um, the addendum and it says, you got two boxes here, and this is where the confusion comes in. Which one do I check? You check one. Or both. If you've checked, authorized on the listing agreement, then you're at least gonna check one. The seller is willing to pay buyers broker compensation up to, and you put in how much that's going to be.

Now, are you then authorized to disclose and market that amount to buyers and buyer agents? That would be the second button. So if you don't check the second button, you do. You can say he's willing to pay. She's willing to pay, but you cannot disclose how much. The second box is what's required for you to disclose, Hey, it's, you know, like, you know, it is 25 bananas, or whatever it is.

That's how you are able to get permission to disclose how much it is. I'm seeing about six in one hand, half a dozen, the other on this being filled out by sellers. In practice, sellers are choosing both ways - to authorize to let buyer agents know they will CONSIDER paying compensation, and the majority are NOT placing in the second box, how much that compensation is - so it's up to the buyer and their agent to insert it on the front page of the contract and let the negotiation begin!

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