This is the eighth episode in our new video series depicting the seismic shift in the representation of buyers in 2025, and is an excerpt from the firsttuesday Buyer Representation Bonus Training™.
The Bonus Training dramatizes:
- the origin of the “same-percentage, same-split” industry custom unwound January 1st, 2025 by legislation;
- the contents of the newly-mandated buyer representation agreement to earn a fee, also called a BRA;
- critical rules surrounding retainer periods, and how buyer representation is extended or modified; and
- your practical use of the buyer representation forms as depicted through various sample transactions and scenarios.
The Buyer Representation Bonus Training™ is available to current and future firsttuesday students without charge.
The critical warning dramatized in this episode: A seller broker’s tortious interference with the fee arrangements between the buyer and the buyer broker is as imprudent as whacking a hornet’s nest – just don’t do it.
Counter the purchase price – not the fee amount
Consider the seller broker who receives a purchase agreement offer a buyer broker submitted. A provision in the offer calls for the buyer broker to be paid a fee out of purchase price funds.
The seller broker reviews the purchase agreement and decides the purchase price offered is too low to accept — something the seller decides, not the seller broker, though they may make recommendations.
The seller agrees to counter the buyer’s purchase offer with a higher price. The seller broker prepares a counteroffer form for the seller’s signature.
May the counteroffer the seller broker prepared counter the buyer’s total purchase price?
Yes, of course! Nothing has changed in this regard.
The buyer’s total purchase price is a proper subject for negotiations between buyers and sellers for brokers to manage. [See RPI Form 150 §8]
But may the seller broker counter the buyer broker’s fee?
No!
The seller broker, as in the past, may not interfere with the amount the buyer broker has agreed with their buyer they are to be paid.
Others are not to interfere with the fee the buyer and their broker set, including the seller broker — unless the seller broker intends to tortiously interfere with the fee arrangements between the buyer and the buyer broker. [See RPI Form 150 §8.1]
Thus, the seller broker does not counter the fee amount, all else being up for grabs. By legislation, the fee due the buyer broker is the domain of the buyer and their broker. The fee is negotiated and entered in a signed buyer representation agreement, mandated in all buyer-client arrangements with a broker. [See RPI Form 103.1 and 103.2]
The penalties for failing to have a buyer representation agreement subjects the broker’s license to review for violating real estate law. [Calif. Civil Code §1670.50(e)]
Continuing our example, the seller broker counters the buyer broker’s offer on a Counteroffer form. [See RPI Form 180]
The Counteroffer provides a space for the seller broker to list the alternative terms and conditions the seller wants as a counter to the buyer’s offer. [See RPI Form 180 §2]
The seller broker also enters an expiration date for the buyer’s acceptance of the counteroffer. When no specific date is given, a reasonable time to accept is permitted. [See RPI Form 180 §3]
The seller signs and dates the counteroffer. The broker signs the counteroffer to acknowledge their representation as the seller broker. [See RPI Form 180]
Alternatively, instead of using a Counteroffer, a seller broker may choose to make a new offer by preparing a fresh purchase agreement form to submit as the counteroffer.
When the replacement purchase agreement is prepared, reviewed and acceptable to the seller, the seller and their broker sign the purchase agreement. The offer is submitted to the buyer broker as the seller’s counteroffer. Thus, the counteroffer is documented as an original purchase agreement offer with no reference to the rejected offer. [See RPI Form 150]
Related video:
Hi GR,
Thank you for your query.
A seller who is focused on the amount of net proceeds in cash on closing evaluates their own net sheet rather than the contract previously signed by buyer and broker. A seller wishing to alter the amount of money they receive in the sale may counter at a price that, when analyzed in a net sheet, will deliver the sum of money they want.
This video covers the net sales proceeds aspect: https://journal.firsttuesday.us/illustrating-the-fee-math-involved-in-a-sale-pt-ii/95965/
We provide our seller net sheet form here: https://journal.firsttuesday.us/forms-download-2/form310/. This form is used as a checklist when reviewing the itemized sales costs and net proceeds the seller can expect on closing at the price and terms reviewed.
The amount of the seller’s net proceeds is easily determined and disclosed by the seller agent or calculated on the net sheet form. This material information is necessary for a seller to agree to the price. Only when the seller has sufficient knowledge of the net proceeds are they able to make a prudent decision to agree to the buyer’s purchase price or submit a counteroffer.
This offer may be accepted or rejected depending on the needs of the buyer.
However, the seller and their agent or broker may not mess with the buyer broker fee, which is negotiated between the buyer and their broker prior to submitting an offer to the seller.
Attempting to alter the amount of the contractually-agreed-upon fee would be tortious interference with a contract.
Additionally, this type of conduct is what the courts have looked for in the past when evaluating price-fixing. See People v. NAR for a larger-than-life example. [People v. National Association of Realtors (1984) 155 CA3d 579]
Kindly,
Editorial Staff
Confused. The buyers are making the buyer broker fee a part of the terms. Why can’t a seller counter a lower amount they will pay/contribute?
Where is the new law does it point this out?