Welcome to The Holliday Team, your Real Estate Information BLOG, where we explain changes in the Real Estate Industry so you are kept well informed.
So you heard about some changes in the real estate industry?
Yes, on August 17, 2024, a new law went into effect. Many are referring to it as the "NAR Settlement".
As a result of this lawsuit that occurred in the Midwest, we had to make some changes Nationwide on how we conduct our real estate business.
Our Great Service and Attention to Detail with our team, has not changed, nor has our Commitment to our clients, only our practices have changed.
The first thing that changed, is EVERY time you meet with a Real Estate Professional to preview homes (live or virtually), the Buyer is required to negotiate and sign a Buyer Broker Agreement ("BBA").
EVERY BUYER must be represented by a Real Estate Agent through the BBA to preview properties. Keep in mind, the Seller was always represented by contract, in order to list the home on the market to find ready, willing & able buyers. Buyers weren't always represented until an offer was prepared. Now everyone must be represented by a contract if they use an agent.
Let me further explain.....
In the past, the seller offered compensation for both their Listing Agent and the listing agent "shared" that total negotiated compensation to the Buyer's Agent and disclosed this offer in our MLS. (example: the seller negotiated 5% total compensation, the Listing Agent then offered 2.5% to the Buyer's Agent to represent the buyer and kept the other 2.5% as their compensation to represent the seller). That's not the case any more.
Now, the Seller negotiates the compensation they wish to pay for their Listing Agent, but is not required to negotiate compensation for the Buyer's Agent to represent the Buyer. It doesn't mean they won't, it just means they no longer have to negotiate the compensation for the buyer's agent, that the seller once paid to the buyer's agent and it is no longer disclosed in our MLS either. This means, the Seller may or may not negotiate compensation for the Buyer's Agent, therefore, the Buyer and your real estate professional must now negotiate this compensation for services rendered, on the Buyer Broker Agreement (BBA), BEFORE previewing any homes (in person or via video), in the event the Seller does not offer the Buyer's Agent a compensation. This cost would be in addition to the Buyer's escrow and lender closing costs/fees paid at the close of escrow. The BBA serves as our negotiated compensation invoice for payment due at closing.
However, at the time the buyer instructs their agent to prepare an offer on a home, along with that offer, your agent will submit a Seller Compensation Addendum requesting the Seller's contribution towards the buyer's agent's compensation for representing the buyer.
If the seller agrees to the negotiated compensation on the Addendum, then the signed addendum gets submitted to escrow for payment from the seller to the buyer's agent at closing and the buyer may not pay for their agent's compensation.
If the seller agrees to only pay partial compensation for the buyer's agent to represent the buyer, then the buyer may pay the difference, as negotiated on the BBA we completed before looking at homes.
Real Estate Professionals work hard for their Buyers, making sure all the details are addressed that are important to their Buyer clients. We start with our buyer consultation meeting going over the clients needs/wants, the processes of the transaction plus the BBA, research homes that meet our buyer's needs, make appointments for all showings, map out our day to utilize our time efficiently, look up comparables to be sure the home is priced right as well as the offer, discuss advantages/disadvantages of each home, spend a lot of time driving to show properties to our clients, advise our clients within our area of expertise, discuss and prepare offers and corresponding documents, answer questions and assist as needed throughout the entire process including with escrow and your lender, schedule your inspections and meet with the appraisers, meet with inspectors, contractors, appraisers and/or escrow officers as needed, attend escrow closing if requested to do so, and many other related duties. Our compensation is paid to us at the closing, not before. We work for free up front until we close on your home.
Real Estate Professionals work hard for their Sellers, making sure we discuss their needs, wants and timelines to move, make sure all the details are addressed that are important to them, discuss the comparables to determine the best list price so that it appraises should a buyer use financing, preview the home and assess property for any suggestions that will help it to sell faster and for more money, prepare and discuss the listing contract and all corresponding documents, design colored flyers and just listed cards once the listing is active to send out, take quality photos for the MLS, prepare the listing for the MLS, upload the photos and create captions for each photo, collect any necessary documents such as Seller Disclosures, any other disclosures required at the time of listing, prepare the listing file for broker approval, have sign installed, print and deliver flyers every Friday, answer questions and assist as needed throughout the entire process, schedule and meet with inspectors, contractors, appraisers and/or escrow officers, as needed, attend escrow closing if requested to do so, many other related duties. Our compensation is paid to us at the closing, not before. We work for free up front until we close on your home.
To help with FAQ that our clients and future clients may have regarding the written Buyer Broker Agreement and the changes, we have a LINK BELOW to NAR's pdf on their website which we feel may be helpful during this transition.
https://www.nar.realtor/sites/default/files/2024-09/consumer-guide-negotiating-written-buyer-agreements-2024-09-17.pdf
Feel free to contact our team with any questions or for an appointment to assist you with all your real estate needs.
We look forward to working with you soon.
Stay tuned for more information and links to these changes and more!
Sincerely,
Angela Holliday, Associate Broker
928.234.7534
thehollidayteam@gmail.com
Jill Martinez, Realtor (team member)
928.719.6633
thehollidayteamjill@gmail.com
The Holliday Team @ Keller Williams Realty Sonoran Living