Section: Seller Strategy

Author: Susan Isaacs, Washington DC Real Estate Strategist

How To Determine A Home’s Value

Why is it so difficult? There’s a saying in real estate: “A home is worth what someone is willing to pay for it at any given point in time.” But how do buyers arrive at a number?

Understanding real estate valuation isn’t just about pricing. In its larger scope, it’s about making smarter financial decisions and ensuring a seamless transaction in Washington, DC’s unique and competitive real estate market.

Property value can be summed up as an equation of assessed value, appraised value and market variables (value and availability of the home and its features against others in the immediate neighborhood or similar neighborhoods and demand for the home), the property’s location within a neighborhood and general neighborhood desirability, along with list price, days on market, market conditions and time of year.

Value Analysis Starts With Your Agent

An experienced real estate agent is likely to be your most effective asset in pricing homes. We’re in and out of competing homes in many neighborhoods on a regular basis, understand the market and receive constant feedback from buyers and sellers. We also have proprietary brokerage tech that simplifies complex calculations and presents findings to you in an understandable and organized way.

Here are some of the metrics we use to price real estate in one of the nation’s most competitive markets.

Two Basic Methods

Sales Comparison Approach (CMA) comparing recent local sales)

• Identify the 3 - 5 most similar homes sold in the last 3 - 6 months within a one mile radius. Calculate the price per square foot of each comparable property (Sale Price / Square Feet). Add or subtract value from the comparable properties based on differences (e.g., subtracting value if a comp has an extra bathroom or adding value if your home has a finished basement). These adjustments can become quite detailed.

• Formula: Price Per SF - negative differences + positive differences

Cost Approach (rebuilding cost minus depreciation plus land value)

• Estimate the current cost to rebuild the structure from scratch at today’s labor and material prices. Subtract physical wear and tear, functional design flaws, or external economic depreciation.Add the estimated market value of the vacant land. This method is unsuitable for resale homes and getting an accurate estimate for new construction would require information developers are not known to release, such as margins, land, materials and labor costs.

• Formula: Property Value = Replacement Cost - Depreciation + Land Value

Regardless of the method used, unless you’ve physically toured each of the comparable properties, most adjustments are subjective, based on photographs and comparison of basic characteristics. Neither method will tell you why a buyer paid far more for one house than others on the same block with similar or same characteristics. A tour of both homes would likely make the reasons for that decision clear.

Take Note

• Review comparables objectively

• Watch Days On Market for similar homes

• Study hyper-local market data

• Keep an eye on citywide market trends

Data Sets

Review information from multiple datasets:

1. Micro-Neighborhood Market Data

• In-Depth Comparable Sales: Additional recent sales of similar homes in the micro-neighborhood, with greater emphasis on adjustments;

• Current Listings & Pending Sales: This set includes active listings and listings under contract. This metric provides insight into current market demand;

• Current Inventory: Matched to home type and basic characteristics;

• Absorption Rate: The rate at which homes were sold;

• Days on Market (DOM): Average time properties take to sell, indicating market conditions;

• Price Trends: Median and average prices for a particular time frame;

2. Property-Specific Data

• Home type (e.g., single family detached or attached, condo, co-op, condop, multifamily type (ex. legal basement rental vs ‘in-law suite);

• Square Footage And Lot Size: Home size and lot size typically factor into values;

• Home Features: Number of bedrooms, bathrooms, updates and renovations, energy efficiency, smart home features and home type-specific ‘must-haves’ (e.g., elevators, parking, in-unit washer/dryer, floor level and views for multifamily buildings);

• Age & Condition: New construction, remodeled or renovated, and well-maintained homes are often valued higher;

• Zoning & Land Use: Consider development potential and expansion potential and restrictions;

3. Location-Based Data

• Neighborhood Comparisons: Pricing variations within micro-markets can vary even by which side of a street the property is sited on;

• School District Ratings: Home values tend to be higher in highly-ranked school districts;

• Proximity to Public Transportation: Proximity to Metro lines and bus stops is a key factor in DC real estate values. Residential neighborhoods with easy access to grocery stores, restaurants and ships are highly desirable;

• Crime Rates & Safety Data: Affects desirability and pricing;

4. Economic & Financial Data

• National Economic Trends: CPI, PCE, PPI, OER, GDP growth, jobs and consumer data impact overall demand;

• Mortgage Interest Rates: Lower mortgage rates increase affordability, but put upward pressure on home prices over time if sustained demand is high;

• Job Market & Income Levels: Higher incomes support higher property values. In the District of Columbia, employment tied to the federal government and city government is high, so economic conditions, both local and national, government hiring and layoffs, along with policy and other factors impact the Washington DC real estate market to a greater degree than is experienced in other areas of the country.

Each of these sets must be weighted against market activity and conditions.

Using The Right Data

Internet and Ai search results often conflate data for the Washington DC Metro Area (DCMA, or “Greater DC Area) with that of the District of Columbia, though they are two distinctly different markets. So be sure to differentiate between markets when evaluating data.

DC and DCMA data can be found on this site’s Market Data page. It is updated weekly and monthly.

Other Metrics

Months Supply of Inventory (Supply vs. Demand Indicator)
This metric, also known as MSI, shows how long it would take to sell available inventory at the current sales rate. A low number means high demand and a high number indicates low demand. MSI is calculated by dividing the current month’s inventory by the average of pending sales over the previous 12 months. It can also be calculated using monthly closed sales, or combined with absorption rate analysis to show the sales rate if no new listings were added.

Calculate It

Months of Inventory = (Active Listings ÷ Homes Sold Per Month) × 100 =

• For District of Columbia:
  Below 4 months → Seller’s market
  4-5 months → Balanced market
  6+ months → Buyer’s market

Absorption Rate (Market Demand Indicator)

This metric measures how quickly homes are selling. A high absorption rate points to a seller’s market, while a low rate indicates a buyer’s market.

Calculate It

Absorption Rate = (Homes Sold in the Last 30 Days ÷ Active Listings) × 100 =

• Above 20% → Seller’s Market (rising home prices)

• Below 15% → Buyer’s Market (potential negotiation)

Home Price Appreciation Rate (Market Growth Indicator)

This metric measures how fast home prices are increasing or decreasing over time and helps predict future property value trends.

Calculate It

Appreciation Rate = (Current Home Price – Previous Home Price ÷ Previous Home Price) × 100 =

• 3-5% per year → Average growth

• Above 5% → Strong market growth

• Below 3% or negative → Declining market

Generally, a healthy, balanced real estate market is considered to have an inventory and absorption rate of six months. A rate greater than six months indicates a buyer’s market, and a rate under four months is a seller’s market. To target specific trends, the same analysis can be conducted by price, home type and/or by neighborhood.

Listing Price Trends. Are listing prices in a designated location decreasing or increasing? Search comparable sales and pricing trends within a 1 mile radius of the subject property, then narrow the search to the specific block you want to target.

Cooperative Compensation represents a new wrinkle in determining the market value of a DC home. Historically, the cost of brokerage compensation has been folded into real estate listing prices. To what degree it is realized comes down to a per property variable, but typically, at least some portion is baked into overall market value. With the new system of eliminating offers of cooperative compensation from MLS comes less transparency, more concession activity and the need for a separate valuation history. Bright MLS removed offers of buyer broker compensation in 2024, but its record of concessions will remain. This record will become a marker for valuation, albeit an incomplete one. Offers of buyer broker compensation may still be made by sellers off-MLS. So there will be a blind spot where data used to be for a large number of DC real estate transactions. It will be interesting to compare pricing trends on the new timeline against historical data.

Median and Average data sets. Median Sales Price is the half of all purchases falling below the target sales price, and the half above purchase price during a specified period of time. Median Sales Price is considered an indicator of market strength. Median Sales Price is considered a stronger indicator than Average Sales Price, which is the sum of all sales prices divided by the total number of sales. One low or high sale can skew this indicator, making results less reliable.

Data on the Number of Homes Sold is compiled most reliably on a monthly and annual basis. Sold volume provides a measure of demand. This data adds perspective to your analysis, since certain months are often considered more or less active than others, and economic or other events affect the market.

The Average Sales Price to Listing Price Ratio in any particular neighborhood can help provide some understanding of your local real estate market. Unfortunately, listing prices are not a true measure of a home’s worth and some may be unrealistically high or low. Averages can be altered by just one sale, so this is not the most important factor in determining DC real estate values.

The Price Per Square Foot metric can vary by neighborhood, street or condominium building. These values can also be affected by market conditions, time of year and location, among other factors. Building codes could affect this metric as they relate to livable square footage. Learn the values for your target property and if the data is supportive of your negotiating position, factor this in, though don’t over-emphasize it. All square footage is not considered equal.

Relative Property Condition is the value of a home’s location, condition, features, finishes and other attributes relative to similar properties on the market at that particular time. It is one of the most difficult values to compute because such comparisons can be subjective. We can all discern difference between a derelict property and one in average condition, but differentiating between two comps in good condition with a laundry list of similarities and differences? Buyers often do not have the information, experience or objectivity to accurately assess for market value rather than their personal preferences.

Relative property condition is a valid tool in structuring your negotiating strategy if you have physically inspected the competing listings and understand the value of their differences. Photos and old listing descriptions are not an accurate measure of this metric, nor is price per square foot. Buyers should seek expert advice when using this metric in formulating offers.

Listed Versus Sold

The list price is the point from which negotiation begins, but not all list prices are based on fair market value.

While it may be tempting to adopt values from listed properties that have not yet sold, this should be the least-employed value marker in determining a subject property’s price. Major lending guidelines that appraisers use, such as the Fannie Mae Selling Guide, require a strict minimum of three sold comparable sales and final value must rely on a minimum of three closed sales. Current listings or contract offerings may be included only as extra supporting data to show market trends, competition, or direction of values. In new construction where no units have closed, guidelines may allow pending sales in lieu of settled sales within the project, but they still require settled sales from outside the project.

Unique Values And Preferred Locations

Does the property possess unique factors that make it more desirable than others in its location or of its home type? These properties often sell well above ‘comp value’ in the District.

That Thing Everyone Wants

Every year, there’s a home type, style or location trending in the DC real estate market that has buyers bidding fiercely against one another. Keeping these trends in mind when evaluating comparables will help explain that ‘unusually high sold price’ for some properties.

Be Aware

• On paper, the value of a home might become fairly clear, but as economic influences, market conditions, neighborhood sales and buyer behaviors shift, value evolves.

• Review the Comparative Market Analysis prepared by your agent and discuss your options.

Why Valuation Matters

When you’re purchasing one of the most expensive assets of your lifetime, it’s good to know that the price you’re paying is justified. The same is true of selling that asset.

For Home Buyers

• Knowing how a home is valued helps buyers determine if a listing price is based on fair market value. If a home seems overpriced, a firm grasp of market valuation principles can help buyers and agents negotiate a lower offer or request seller concessions.

• Since lenders base mortgages on appraised value, understanding valuation can prevent appraisal issues once the home is under conrtact.

• Valuation data can help buyers assess future appreciation and investment potential.

For Home Sellers

• Home sellers are able to set a fair market listing price using valuation data. Overpricing leads to longer days on market and price reductions, while underpricing may leave money on the table. So understanding what the fair market value of a home is, saves sellers time and money.

• Sellers can also use valuation data such as sold price to original list price ratio to determine how much leeway they might have in pricing their homes.

• Sellers can also use valuation data to help determine which value-add updates to undertake before listing their homes.

Other Factors That Play Into Market Value

Emotion

Emotional attachment factors into pricing DC real estate, on the part of both buyer and seller.

A buyer who falls in love with the feel of a home, or has FOMO due to a history of losing properties to higher bids in a specific, desired neighborhood, is likely to pay much more for a home than other buyers in the same pool. Sellers appealing to this buyer are often the beneficiaries of unusually high sales prices if their presentation is well matched to that target buyers’ expectations.

Sellers who have a high level of emotional attachment to their home can sometimes be blind to the need for updating and staging, and tend to want to overprice. This is where the objectivity of an expert real estate agent is especially valuable.

Presentation

Two homes could be exactly alike in everything but they way they’re presented. Guess which one will sell first, and for a higher price?

Your home can be in one of DC’s best locations, have popular attributes, be ready to list in early spring and still suffer on the market due to poor, or even average, presentation, especially if competing listings have been professionally staged. Being realistic about your home’s condition, identifying your target buyer and their expectations, and marrying the two with repairs, updating, decluttering and staging will deliver optimal results.

Uncertainty Can Be A Tool

Uncertainty is a key factor for buyers in competitive situations. Each buyer’s offer is a reflection of their personal search history and attachment to the home, but the winning bid can differ drastically depending the size and aggressiveness of the buyer pool at that specific moment in time. This urgency, or lack of it, is an element we factor in when pricing DC real estate.

Timing Is Important

Common time-related questions are; “Is my home really worth more in the spring than the summer?” from sellers, and “Will I get a better deal in August or mid-winter?” from buyers. The answers are, again, subjective. A home certainly might sell at a higher price in spring versus summer, but it could suffer by comparison to the glut of similar listings in the spring market and take longer to sell due to competition. Listed in August, however, it might garner favor amongst the more desperate souls braving the ghost town market of late summer. Good timing depends on your needs, property type, and your agent’s savvy in handicapping the market.

Terms Are Key

Each term of an offer has a value to individual sellers. For instance, ‘Offer A’ may include a higher purchase price, but ‘Offer B’ may have few or no contingencies, lessening the risk that often accompanies them. There’s a threshold at which most sellers will choose security over price. Every seller values each term differently and there are limits to how much of that information is available to buyers when offers are drafted. Be sure of your limits and objectives before listing your DC home for sale and cater to buyers who can provide those terms.

So Is There A Concrete Value For A DC Home?

Quick answer: Almost never. You can compute, compare, poll and hypothesize, but in the end there is only a value range based on old data, market trends and many other outside factors. Knowing the market well and evaluating with an unemotional, unbiased viewpoint are the best indicators when pricing DC real estate.

Real Estate Agency In Washington DC

Section: Everyone Guides
Author: Susan Isaacs, Washington DC Real Estate Strategist

Real Estate Representation

Learn about real estate agency and agreements in the District of Columbia. Explainers and resources to help buyers and sellers understand the roles, agreements and choices available for their transactions.

Listing Your Home For Sale In DC

Listing Options

Types of real estate agency available to Washington DC home sellers and the basic provisions of the GCAAR listing agreement.

• Open Listing: Owners can sell their home themselves under the terms of this non-exclusive agreement. Owners may have listings with more than one brokerage. Commission is paid to the agency who is the procuring cause for a ready, willing and able buyer who makes an offer on the property. Should the owners find the buyer themselves, no commission is due;

• Exclusive Agency Listing: The broker will be the only brokerage representing the owner, but the owner may still sell the property themselves and avoid paying commission under the terms of that provision. The broker may cooperate with other brokerages to bring in a buyer and the listing commission is split between the two brokerages. Exceptions and deadlines may be included in the agreement;

• Multiple Agencies Listing: When a seller uses more than one brokerage to list their home, the listing agreement used must be for the jurisdiction where the property is located;

• Single Agent Buy & Sell Transaction: This is different than Dual Agency, where the agent represents both the buyer and seller of the same property. In this model, sellers of a home purchasing their next home also hire their listing agent as their buyer agent;

• Designated Agent: Two agents affiliated with the same brokerage represent the property owner and the buyer of the property. Each agent is designated by the brokerage as the representative of one party only;

• Dual Agency: Single agent representing both the property owner and the buyer of the same property.

The Listing Agreement

Types of real estate agency available to Washington DC home sellers and the basic provisions of the GCAAR listing agreement.

Key Components

• Jurisdiction

• Type of agreement

• Length of agreement

• Listing price

• Compensation (various addendum forms used to define broker compensation)

• Listing Status (Private Exclusive, public MLS or hybrid) (various addendum forms used to define exposure)

• Keys, lockboxes & signage

• Inclusions/Exclusions

• Property condition statement

• Property disclosure of material facts

• Lead paint disclosures

• Pest Inspection terms

• Encumbrances/Liens/Title

• Authority to disclose existing offers

Considerations

In addition to reviewing each section of the Agreement with your agent, you’ll want to discuss terms of the agreement. These are some of the points you might consider:

Agreement Types

• What types of listing agreements are offered by the agent’s afilliated brokerage?

• What services are included?

Broker Compensation

• At what rate is listing broker compensation paid and how?

• Are sellers required to offer buyer broker compensation?

• If sellers choose to compensate buyer brokers, in what amount, and what form does compensation take?

• How is cooperative compensation negotiated?

• Will any cooperative compensation be built into the list price?

• How is cooperative compensation legally communicated to buyers?

• When and how are brokerages and their agents paid?

• Are there any additional fees, such as a brokerage “additional commission” fee?

• Is there an early termination fee included?

Marketing And Presentation

• How will the property be marketed? (public MLS, private exclusive, hybrid)

• Who pays costs of photography, floor plans and virtual tours? What’s included?

• Who pays costs for staging?

• Will open houses be held?

• Will a sign be present on the property?

• Will a lockbox be present on the property?

Determining The Listing Price

• What factors contribute to the listing price of the home?

• What’s the overall market like in DC? In my neighborhood? For my home type?

• How does condition factor into the price?

• What unique aspects of my home will add or detract from its market value?

• What type of price flux can be expected in the current market?

• Review the comps | CMA for the property. What are the three closest comparables?

Showing Restrictions

• Are there days and times the property will be unavailable?

• Will showings be ‘go and show’ or require an appointment?

• Will all utilities remain on for the duration of the listing?

• Is parking available for showings?

Managing Offers

• How and when will offers be submitted?

• If multiple offers are received, how will the review process be structured?

Condos And Cooperatives

• Discuss condo association documents, fees & turnaround time. There are three separate sets of documents involved in a condominium resale;

  • Condominium Questionnaire (generated by lenders). There is a fee associated with this form which is charged back to the borrower, either upfront or as part of closing costs;

  • Condominium Closing Disclosure Statement (supplied to title). Some are free, some associations charge the seller up to $150. Many title companies include this fee in the Seller’s closing cost escrow, but some title attorneys and title companies may require it to be paid upfront);

  • Resale Certificate Package Commonly known as “condo documents,” this package may be generated electronically or printed. It is ordered from the condo association, typically via the management company. The fee to Sellers commonly ranges from $250.-$400. depending on the originating entity.

• Discuss condo listing rules: Are there rules regarding open houses, signage, elevator use for staging and renovation materials/crew, etc.? It is up to the seller to divulge these to the agent at the time the listing is taken.

Exchanges

• Who will act as the Intermediary?

• What type of exchange will be used?

• Has a replacement property been identified?

• Add the appropriate Addendum(s) to the listing agreement and language to the listing when published

Leases

• If all or a portion of your property is leased, or the property is multifamily, discuss lease expiration date(s) and other terms

• How much notice will tenant require to show? Restrictions? Pet provisions?

• Provide lease copies, tenancy documentation

• Discuss TOPA

• Add the appropriate terms and Addendum(s) to the listing agreement and language to the listing when published

Listing Status Definitions

Understanding the types of real estate agency for DC home sellers and basic provisions of the listing agreement.

MLS Status

COMING SOON: Pre-listing status on MLS. No showings permitted. Limited to *** days.

ACTIVE ON MLS: Listed and disseminated to third party aggregators. Showings allowed. No agreement of sale in effect.

ACTIVE UNDER CONTRACT: Listed on MLS, under contract with contingencies. Seller is allowing showings and accepting backup offers. If the lister receives an offer while property is in this status, it must be presented to the seller.

PENDING: Listed on MLS, under contract with no contingencies. Seller is not accepting additional showings or backup offers..

TEMPOFF: Seller temporarily suspended showings. Listing contract between broker and Seller remains in effect

CLOSED: Settlement has concluded and the property is no longer on the market.

COMP ONLY: Entered for comparable purposes .

WITHDRAWN: Marketing ceased, the Listing Agreement may still be in effect. The MLS DOM/CDOM will reset when a new listing is added after the previous listing has been in Withdrawn status for at least 61 days and no other listing for the same property has been created.

CANCELED: Seller and listing broker have terminated the Listing Agreement prior to its expiration date. DOM/CDOM has stopped and will reset on or after the 61st day.

EXPIRED: The expiration date on the Listing Agreement has passed and an extension has not been secured. DOM/CDOM has stopped and will reset when re-listed on or after the 61st day.

Compass Brokerage Status

PRIVATE EXCLUSIVE: Compass’ off-market status. Showings permitted. Part of Compass’ Three Phase Marketing Plan.

COMPASS COMING SOON: Compass’ pre-listing status. Showings permitted. Part of Compass’ Three Phase Marketing Plan.

The Buyer Agency Agreement

About buyer agency and key components of the GCAAR Buyer Agency agreement.

What Is Buyer Agency?

It is a real estate agency relationship between a a buyer principal and real estate brokerage, designating a licensed real estate agent to perform specified duties for the buyer.

The buyer agency agreement (BAA), is a contractual agreement between the buyer and brokerage designating the buyer’s chosen agent, dictating the provisions, terms and conditions of their working relationship and the agreement for broker compensation and fees.

Buyer Agency protects buyers and ensures that their agent works in their best interests, not the seller’s, providing the duties of loyalty, care, confidentiality and other fiduciary duties. Agents who are not acting as buyer agents are effectively subagents of the seller.

A written agreement between the buyer and brokerage must be signed prior to an agent performing work on behalf of a buyer, including touring of properties. An agency agreement converts a ‘customer’ to a ‘client’ and triggers duties and obligations by both the brokerage/agent and the buyer/seller.

Read More:

• Buyer Agency

• Homebuying Steps

• Why A Buyer Agent Matters

Types Of Buyer Agency

• Single Agency: An agent from brokerage A represents the seller and another agent from brokerage B represents the buyer in a transaction

• Single Agent Buy & Sell Transaction: The same brokerage and agent are hired to represent a party who is buying and selling property

• Multiple Agents: As a buyer, you can choose to have one agent or multiple agents representing you in one jurisdiction, or more. For example, a buyer might hire one agent for representation in Virginia, another for representation in DC, and a third for representation in Maryland. Agents are licensed in different jurisdictions and not all agents are expert in all markets within the DCMA. A buyer could also hire multiple brokerages for representation within the same market. This arrangement can become a complex situation requiring extensive communication, coordination and disclosure. Overlapping neighborhood boundaries can become an issue, and scheduling showings/tours can become a logistical problem, especially if agents are affiliated with different brokerages. This can lead to disputes, ‘procuring cause’ claims, and violations of agreements that may result in agents taking action against one another and/or the buyer

• Transaction Agents: These agents do not owe a fiduciary duty to either the buyer or the seller and do not represent either side. Instead, they facilitate a transaction by providing the paperwork for one or both sides and managing the transaction in the most basic manner, with duties specified in the agreement

• DualAgency: “Dual Representation” occurs when Seller or Landlord has entered into a listing agreement with a licensee and the Buyer or Tenant has entered into a buyer brokerage agreement with the same licensee. When the parties agree to dual representation, the ability of the licensee and the brokerage firm to represent either party fully and exclusively is limited. The confidentiality of all clients must be maintained. Prior to entering into a contract in which the buyer and seller are represented by Dual Agency, this relationship must be disclosed/confirmed in writing.

• Designated Agent: Agent who is designated by the broker to represent either the buyer or the seller in a dual agency transaction. “Designated Representation” occurs when the Seller or Landlord has entered into a listing agreement with a licensee and the Buyer or Tenant has entered into a buyer brokerage agreement with a different licensee affiliated with the same firm. Each of the licensees, known as Designated Representatives, represents fully the interest of his/her individual clients. The Supervising Broker is a Dual Representative of both the Buyer and Seller, and must not disclose information obtained in confidence to other parties in the transaction.

Notes on Designation:

• If the Seller or Landlord does not consent to Designated Representation, the property may not be shown by any licensees affiliated with the brokerage firm that have entered into a representation agreement with a prospective Buyer or Tenant.

• If the Buyer does not consent to Designated Agency, the Buyer may not be shown any properties listed by other licensees affiliated with the brokerage firm. Prior to entering into a contract in which the buyer and seller are represented by Designated Representatives, the relationship of both Designated Agents must be disclosed/confirmed in writing.

Key Components Of The Agency Agreement

• Type of agreement: Discuss types of representation, the pros and cons of each

• Jurisdiction: The geographical areas the agreement will cover (DC, MD, VA)

• Length of agreement: Define the term of your agreement

• Compensation: The amount of compensation the subject broker will receive. Additional documentation will be required if the seller contributes to buyer broker compensation

• Fees: Discuss fees like brokerage “admin” “technology” or “additional commission” fees. Ask your agent to explain these provisions and their implications for your transaction

• Protection Period: The term during which the subject broker must be paid if a sale results following termination or expiry of the agency agreement

• Additional terms: Write-in

In addition to reviewing the entire agreement with your agent, you’ll want to negotiate certain terms:

Compensation

The buyer agreement must include four components concerning compensation:

1. A specific and conspicuous disclosure of the amount or rate of compensation
   the agent will receive or how this amount will be determined

2. Compensation that is specific, not open-ended

3. A term that prohibits agents from receiving additional compensation for brokerage services from any source that exceeds the amount or rate agreed to in the buyer agency agreement (such as bonuses)

4. A conspicuous statement that agent fees and commissions are fully negotiable and not set by law.

NAR FAQ

Additional Forms

You’ll be asked to sign additional brokerage and jurisdictional disclosures forms such as a wire transfer advisory, associated businesses disclosure, dual and designated representation disclosure, and acknowledge a number of disclosures required in your jurisdiction, such as an inspection advisory, a pamphlet on lead-based paint, equal housing advisory, etc.

Working With A Buyer Agent

Scope of Work

What should a good buyer agent do? Here are a few of the duties you can expect:

• Provide full fiduciary representation

• Property Search: Provide feeds from multiple listing services (MLS) and private networks for homes matching criteria. Suggest options and interface with other agents to identify new opportunities. *When you work with a Compass agent, you will be provided access to the Compass ‘Private Exclusive ‘ and ‘Compass Coming Soon’ network. Your Compass Collections will automatically receive off-market listings in that network, which includes Compass International affiliated brokerages

• Schedule Tours, Presentations, Individual Showings and Walk-throughs

• Manage Communication: Schedule showings and tours, facilitate communication with agents, inspectors, lenders and title

• Coordinate new construction tours and walk-throughs

• Coordinate third-party services like home inspections

• Comparative Market Analysis: Evaluate specific property values using the CMA method

• Provide contract documents and esign tools

• Conduct Strategic Offer Negotiations

• Manage Deadlines: Track contingency periods and other deadlines, interfacing with listing agents, associations and management companies, lenders, inspectors, appraisers and title to ensure they are met.

Outside The Scope of Work

It is not a buyer agent’s duty to perform due diligence for the buyer. These tasks, such as reviewing condominium documents and budgets, performing permit and other property-related investigation, and interpreting legal, financial or inspection documents are the buyer’s responsibility. It is always recommended that buyers engage a professional with expertise in these areas, such as an attorney or CPA, and direct questions about inspection reports to the inspector.

Touring

Touring a home now requires a written agreement (since the 2024 NAR settlement)

Open Houses

Buyers are welcome to attend open houses. Hosting agents (who represent the seller) may provide basic information about the property to attendees, but not give advice or perform work such as providing detailed information about the property.

Buyers who have a buyer agency agreement in place but the agent isn’t accompanying should make it clear upon entry that they are represented by an agent, and name that agent. A best practice is to enter your name with the notation “represented by” and the agent’s name and contact information in lieu of your own if required to sign a registration form.

Virtual tours fall under the category of ‘showings’ and a written agency agreement is required to attend.

New construction sales offices are considered ‘open houses’ for the purposes of agency. Represented buyers should always be accompanied by their agents on a first visit, where registration will be required. Appearing without an agent may cause the developer to refuse to pay buyer broker compensation, which is generally factored into the price of the homes. It is a best practice to let your agent manage appointments and inquiries related to new construction rather than doing it yourself.

Ready to take the next step? Reach out to schedule a consultation with Susan Isaacs.