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New Laws in Real Estate

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Paul George,

New Laws in Residential Real Estate

In August, buyer brokerage for real estate went through a change to make fees paid and collected by real estate brokerages more transparent to the public. Fees have always been negotiable but consumers rarely questioned the fees, mainly because home owners who profited from a sale paid buyer brokerage fees.  Buyer’s agents never had to talk about their value because traditionally, sellers paid buyer’s agent fees.

With this change, sellers are still allowed to offer to pay for these fees but if not, buyers are required to pay.  Prior to a buyer’s agent ever showing a property, these fees must be disclosed in a signed buyers agency agreement. All fees are negotiable and can be renegotiated by the agent and the buyer based on what a seller might be willing to offer as compensation. Previously, the listing agency offered compensation up front through disclosing the fee on the multiple listing system (MLS).  As of August 17, 2024, there will no longer be an offer of compensation on the MLS, BUT it can be offered by any other means.

With new technologies, buyers are finding houses on their own.  Finding a home is almost the easiest part. Getting through a complicated transaction is where we prove our value.  We deal with over 100 contingencies, leverage previous relationships with lenders, title companies, other agents, inspectors and other vendors needed before and after the transaction to get to a closing while confirming all of the conditions of the contract are met.  We handle earnest monies, inspection reports, scheduling to accommodate buyers, sellers, lenders, title, agents, etc.  Other duties of mine include navigating through the research, writing of an offer, utilizing negotiating techniques based on a 1000+ transactions and using them to the advantage of the buyer.

As a 30 year plus agent, I will never discriminate and not show a property based on the offer of compensation. I have sold homes previously to many buyers who purchased a “For Sale by Owner” where they did not offer a fee.  The last one I sold was to a young couple who only had enough funds for their down payment and closing costs.  I showed them over 30 properties, wrote five offers that were out bid, made hundreds of calls to agents asking what it might take to get the house, researched comparables and recommended the lender they used. I put in hundreds of hours and did not get compensated (actually they gave me a Cameron Mitchell gift card). The point is, I helped them the same way that I would have helped my million-dollar buyers where I was paid 3% of the purchase price, and I will continue to do so in this new era of real estate.

The thinking behind the new law is that prices of homes will come down because seller expenses will be less.  That is a false hope as we know the market determines pricing.  Also, it will always be in a seller’s best interest to offer compensation to a buyer’s agency as it will attract more buyers.  Attracting more buyers will typically result in higher offers.

Change within our industry is always hard but realtors are very well suited to adapt to changes and prove our value.  The public won’t see much of a difference other than they must sign an agreement before ever being shown a home by a buyer’s agent. The good news is I will continue to “prove my value” to buyers prior to working with me.

 

 

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