By Jeff Lazerson | jlazerson@mortgagegrader.com | MortgageGrader.com | October 6, 2025

Article originally posted in Orange County Register on October 2, 2025

Last week we explored escrow and title insurance pricing. Today’s tips are on finding your best buyers’ real estate agent and negotiating the commission.

Starting with the buyers’ realty agent, if you are going to use a real estate licensee, California law (Assembly Bill 2992) requires you to sign a buyer representation and broker compensation agreement before you make an offer on a property.

The agreement outlines the duration of the contract (not to exceed 90 days), real estate agents’ duties and responsibilities in exchange for you compensating the agent’s brokerage. Before going into the compensation deep dive, let’s first consider how to find an agent who is right for you.

If you’ve already had a previously excellent experience with an agent on the purchase or sale of a home, I strongly recommend you go right back to that person. Don’t fix what is not broken.

If this is a new experience for you, I’d first ask family and friends for recommendations. These must be folks you trust on a deep level —those who would never steer you wrong.

“You should be asking for references from family, friends, associates and others,” said Pat Veling, CEO and founder of Real Data Strategies. “If someone (strongly) says ‘use my agent,’ don’t think about it any further.”

Let’s say you received three strong endorsements in respect to three different agents. I would first meet with each agent for an hour or so. You want to get to know each other a little better. First, do you sense chemistry and connection? Do you seem to communicate well with each other?

Here are some questions and requests to make in addition to viewing their resumes:

—Would you please explain how you work and what I can expect from you?

—Tell me about the last time you won a multiple offer situation for a buyer without having to be the top bidder? How did you make it happen?

—How do you analyze property values ahead of an offer to protect me from overbidding?

—If I told you I was picky and you might have to show me 39 houses before I make an offer, would I still be worth your time to work with and why?

—Would you please describe the last time you saved a transaction from falling out of escrow?

—Please provide the reference contact information of your last three buyers. Be sure to call all three buyers to check up.

—What are you going to do differently than just sending me new listings which I can probably find on my own through Zillow?

—What can I do for you to make your job a little easier?

You should also google those candidates and check their Department of Real Estate licenses to be sure there is no disciplinary action against them.

There are a lot of very talented, hardworking, knowledgeable agents out there. And yes, there are also a lot of slugs. Your goal is to find the one who suits you best. Hopefully, their answers to some of these questions might provide you with more clarity.

Commission Conundrum

The Sitzer/Burnett verdict in 2023 was landmark antitrust ruling against the National Association of Realtors and several real estate brokerages in which they were found guilty of conspiring to inflate home seller-paid buyer agent/brokerage commissions.

Simply stated, as of Aug. 17, 2024, the homebuyer must contractually compensate his or her own buyer’s agent/brokerage instead of the funds coming directly from the home seller.

Realty agents are asking for anywhere from about 2% to as much as 3% of the home’s price as buyers agent/brokerage compensation.

In practice, for the most part, the buyers’ agent’s compensation is still coming from the home seller as a “concession” instead of being called a commission.

For example, you contracted to pay your buyer’s agent 2.5% of the sales price. Your agent makes an offer asking for compensation/concession from the seller for 2.5%. Let’s say the seller agreed to this. Your buyer’s agent’s compensation is now covered through this concession.

In the same example, what happens if the home seller only agrees to pay 2%. The buyer would be obligated to his or her agent to pay the other one-half percent. Or the agent/brokerage could just accept the 2% by choice, not by obligation.

Could the buyer contractually make a deal with his or her agent up front to forgive any compensation shortage? For example, the buyer agrees to pay agent 2.5% but seller is only willing to pay 2%. Can it be pre-agreed in the buyer representation and broker compensation agreement to forgive the difference?

To structure a buyer-broker agreement the way you describe would be illusory and violate real estate law. The law requires that the buyer-broker agreement include the amount that the buyer is obligated to pay the buyer broker when the buyer broker performs the required services.

If a seller is willing to pay a portion (but not the full amount) of the buyer broker’s commission, the buyer remains obligated by contract to pay the difference, but that’s up to the buyer broker. If the buyer broker does not release the buyer from their obligation to pay, then the buyer needs to pay the difference or face potential liability for breach of contract, according to Christina Jimenez, assistant commissioner at the California Department of Real Estate.

Some real estate agents have told me they verbally tell their buyers upfront they might or will, in fact, forgive any compensation concession shortage. One broker told me it all depends on the amount of work she puts into a purchase.

I strongly suggest you get a clear understanding up front as to what your buyer’s agent requires as compensation and why. Most of the agents I interviewed had a hard time articulating to me how they came up with a buyer’s brokerage compensation of say 2%, 2.5% or 3%.

Some agents did point out that if they ask for too little, say 2% and the seller is willing to pay a concession of 2.5%, they feel like they are leaving money on the table.

Next week, I will write about mortgage shopping as I ran out of space to include it this week.

Freddie Mac rate news: The average rate on a 30-year U.S. mortgage ticked up for the second straight week, rising to 6.34% from 6.3% last week. Rates for 15-year fixed-rate mortgages rose to 5.55% from 5.49% the previous week.

The Mortgage Bankers Association reported a 12.7% mortgage application decrease compared with a week ago.

What I see: Locally, well-qualified borrowers can get the following fixed-rate mortgages with one point: A 30-year FHA at 5.375%, a 15-year conventional at 5.125%, a 30-year conventional at 5.875%, a 15-year high-balance conventional at 5.625% ($806,501 to $1,209,750 in LA and OC and $806,501 to $1,077,550 in San Diego), a 30-year high-balance conventional at 6.125% and a jumbo 30-year fixed at 6.125%.

Eye-catcher loan program of the week: A 30-year mortgage, fixed for the first five years at 5.375%, with 30% down payment and 1 point cost.

Jeff Lazerson, president of Mortgage Grader, can be reached at 949-322-8640 or jlazerson@mortgagegrader.com. His website is www.mortgagegrader.com.

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