Awkward Legal Construction
One of the more confusing parts of the standard Minnesota Buyer Rep agreement — the contract governing the relationship between a home Buyer and their Realtor — is the two-part section discussing compensation.
The first part states that the Buyer will pay the agent a to-be-specified retainer fee.
That sure would be nice . . . . but practically, that’s not how Buyers’ agents get paid.
The second part says that the Buyer will pay the Realtor the greater of: a) a specified percentage of the house purchase price; or b) a flat fee.
Devil in the Details
But wait — doesn’t the Seller pay the Buyer’s Agent??
Keep reading:
The very next paragraph explains that any commission that the Buyer’s Broker receives from the Seller or Listing Broker acts as a credit against the amount that the 
Buyer would otherwise owe their Realtor.
Translation: if the Buyer promises to pay their agent 2.7% of the home’s purchase price (a commonly used number), and the home they ultimately buy has at least a 2.7% payout (what the Listing Broker is offering Buyers’ Agents) — they owe their agent nothing.
Which is how it works out the vast majority of the time.
P.S.: Bonus Question — if the payout is more than the specified percentage, is the Buyer ever entitled to a rebate?
No, because the payout arrangement is between the Listing Broker and the Broker that the Buyer’s agent works for — not between the Buyer and their agent.
In legal jargon, there’s no “privity” between the Buyer and the Listing Broker.
