Know All The Options to Sell Your Home. Find out what your home is really worth. Personalized Home Value Estimate
Changes are happening in every state regarding buyer agency when purchasing a home. As of August 2024, a homebuyer who wants to see a property with an agent or a real estate professional must sign a buyer agency contract before viewing a home. This may seem like an extra step in the home-buying process for most of us, but it’s a new law, and we must comply.
Because of this, as homebuyers, you should be cautious when speaking to an agent willing to show a home without first signing the legally required buyer representation agreement. You should probably question how they will handle the rest of your transaction. Also, think twice about calling the listing agent to see a home, as they cannot give you full fiduciary representation or negotiate in your best interests, as they have a contract with the seller to represent their best interests.
The new process. The new policy is that if you want to see a home, we will sit down and discuss our services, what we offer that other agents do not, and what we will and will not do for you during the transaction. This has been our process since the beginning, so for most of our clients, not much will change. We are always up-to-date with the latest developments in real estate; we’re ethical and follow all the rules to represent our clients well.
Transparency in fees. The new law calls for transparency on how and how much the buyer’s agent is being paid. This now adds a new negotiation point in the process. In the past, the seller’s agent offered the buyer’s agent a certain amount of compensation, which was published in the MLS. So when buyers went to look at a house, they didn’t know or usually cared what their agent was being compensated for because it was already factored into the price of the house.
Now, the buyer contracts that you are required to sign will clearly state your agent’s fee. Keep in mind that our contracts have always clearly stated the buyer’s agent’s fee, and that hasn’t changed in a decade. But now, we are required to cover that fee before viewing a house. We are prepared for these changes. To make it easier for both of us, we will have documents on our phones and devices for electronic signature to ensure compliance.
Compensation changes. The compensation of a buyer’s agent is no longer paid by the listing broker but directly by the seller. The seller decides whether or not they will agree to pay a buyer’s agent directly. It works like this: When a buyer selects a house for viewing, we will disclose our fee to represent you upfront. When you find a home to buy, we suggest the seller pay your agency fee out of the transaction. We will write it into the contract so you don’t have to pay our professional fee out of pocket.
However, the seller has the right to agree to compensate us in full, pay part of the fee, or decline to pay any of it. If the seller doesn’t fully cover the fee, you’ll have an out-of-pocket expense at closing. We also need to talk to the lender about this. It’s worth noting that sometimes buyers choose to pay their agent’s fee directly already to be competitive in a multiple-offer situation. There’s no way to know in advance how a seller will respond. It will depend on your offer, but remember that if the seller refuses to compensate your agent, you don’t have to move forward with that house. We can find another house. The new law puts you, the buyer, in control of that situation.
Benefits to sellers. When listing your house, you control how much you offer buyer agents. You might not have paid for your buyer’s agent in the past, but now you can decide if you want to offer compensation to attract buyers.
Potential impact on offers. This law is likely to impact buyers’ offers. With higher interest rates and the rising cost of living, many buyers are already strapped for cash. Adding an out-of-pocket expense for a buyer’s agent fee could further reduce their purchasing power. This could lead to lower offers or buyers backing out of deals altogether. This is why it’s important to discuss this potential impact with your agent when pricing your home.
Many are still adjusting to this new law, but changes will unfold as we move forward to better define these rules. It is important to remember that this law puts buyers’ agents’ compensation in the hands of buyers and sellers instead of the listing agent. Having control of your decisions is never a bad thing.
It’s going to take experience and skilled negotiators to get to the closing table with these changes in the coming months and years. The good news is that my whole team has decades of experience successfully navigating many major shifts and changes in real estate.
Reach out to us at 248-850-2575 or hey@theintegrityteam.com. We look forward to putting our knowledge and experience to work for you, too. You’re in good hands here. Welcome to the Integrity Team. You belong here.
