What's happening
This bill requires buyers, not sellers, to pay all fees and commissions for their real estate agents in residential transactions.
Why it matters
Shifts financial responsibility for buyer's agent fees directly onto home buyers. , making them more aware of—and accountable for—the costs of their representation in a real estate transaction.
Prevents sellers or their agents from paying or negotiating any portion of a buyer’s agent’s fee. , which fundamentally changes the traditional model where sellers often covered both their own and buyers’ agent commissions out of sale proceeds.
Could increase transparency and negotiation over agent services and costs. , possibly leading buyers to shop around for agents, negotiate lower commissions, or even forgo agent representation to save money.
May impact housing affordability and accessibility. , as buyers—already responsible for down payments and closing costs—would need to budget for additional agent fees, potentially making it harder for some to purchase a home.
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Who cares
Headline styles
Buyers Pay Their Agents
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to judiciary
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
7023
IN SENATE (Prefiled)
January 8, 2020
Introduced by Sen. SANDERS -- read twice and ordered printed, and when printed to be committed to the Committee on Judiciary
AN ACT to amend the real property law, in relation to compensating a buyer's agent in a real estate transaction
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. The real property law is amended by adding a new section 442-m to read as follows:
§ 442-m. Compensation of buyer's agent. 1. As used in this section, the following terms shall have the following meanings:
a. "Agent" means a person who is licensed as a real estate broker, associate real estate broker or real estate salesperson under section four hundred forty-a of this article and is acting in a fiduciary capacity.
b. "Buyer" means a transferee in a residential real property transaction and includes a person who executes an offer to purchase residential real property from a seller through an agent, or who has engaged the services of an agent with the object of entering into a residential real property transaction as a transferee.
c. "Buyer's agent" means an agent who contracts to locate residential real property for a buyer or who finds a buyer for a property and presents an offer to purchase to the seller or seller's agent and negotiates on behalf of the buyer.
d. "Seller" means the transferor in a residential real property transaction, and includes an owner who lists residential real property for sale with an agent, whether or not a transfer results, or who receives an offer to purchase residential real property.
e. "Seller's agent" means a listing agent who acts alone, or an agent who acts in cooperation with a listing agent, acts as a seller's subagent or acts as a broker's agent to find or obtain a buyer for residential real property.
2. All fees, commissions or other compensation for any service, help or aid rendered by a buyer's agent in a real estate transaction on
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD14431-01-9
S. 7023 2
behalf of a buyer shall be paid by such buyer. A seller and/or a seller's agent shall not negotiate or pay any part of such payment for services rendered by such buyer's agent.
§ 2. This act shall take effect on the one hundred eightieth day after it shall have become a law.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the real property law, in relation to compensating a buyer's agent in a real estate transaction
Purpose of the bill
The purpose of this bill is to end the "buyer broker rule." This rule requires a seller of real estate to agree to pay the buyer's agent as a condition of listing a home.
Summary of provisions
Section 1: Definitions.
Section 2: All fees, commissions or other compensation for any service, help or aid rendered by a buyer's agent in a real estate transaction on behalf of a buyer shall be paid by such buyer. A seller and/or a sell- er's agent shall not negotiate or pay any part of such payment for services rendered by such buyer's agent.
Section 3: Effective date.
Justification
Even though the Fair Housing Act was passed more than 50 years ago, New York State still has a problem with housing discrimination. Newsday finished a three-year investigation in 2019 and concluded that African- American home buyers were being steered to black neighborhoods.
Currently, trade associations require home sellers to pay the buyer's agent as a condition of listing a home-this is known as the "buyer broker rule." This requirement makes home transactions more expensive.
By ending the buyer broker rule, this bill would reduce the dependence of buyers on real estate agents and/or shift the relationship so the agent is paid by the buyer. This would reduce transaction costs for both buyers and sellers. Additionally, it would limit the opportunity for discrimination because buyers decide which houses to visit on their own.
The New York Times Editorial Board called for the elimination of the buyer broker rule in "The Jim Crow South? No, Long Island Today" on November 21, 2019.
Prior legislative history
New bill.
Fiscal implications for state and local governments
None
Effective date
This act shall take effect on the one hundred eightieth day after it shall have become a law.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.