Buyer will now have to sign contracts before touring homes - PA

[Alan Asriants]

As the title of this post mentions, Buyer should be aware that now the MLS requires Buyers to be in a agency contract with their agent before scheduling any tours. This should have already been a common practice, but because of the commission structure before the NAR settlement, lots of agents did not execute contracts with buyers in order to gain them as clients.

Now Buyers must be ready to sign an exclusive, or non-exclusive agency contract (there is a difference) before touring properties. Your potential buyers agent should have the proper knowledge or at least a mentor that can help walk you through the contract, their fees, and what is involved in the home buying process. 

While this might be something that Buyers are not used to because they are not comfortable getting into an agreement with an agent. It should be a win-win for both parties in the future.

Buyers will win because they will do their complete due diligence and use a professional (as opposed to a family member or friend with just a license, who sells 1 home every 2 years lol) so that they can get the best representation possible. 

Buyers agents will win because then they will have a more secure buyer agent relationship, and a less likely chance that a buyer will go to another agent behind their back.

if you have any questions about the new contracts or the NAR settlement, I am happy to discuss them.

PLEASE NOTE: I am licensed in NJ and PA. Each state will have their own contracts, laws, etc. 

[Jay Hinrichs]

Quote from @Alan Asriants:

Quote from @John Clark:

Quote from @Alan Asriants:

Quote from @Greg Kasmer:

Alan - How would you suggest to approach this from an investor standpoint? I have one agent that typically scans/research residential opportunities for me and another that does multifamily. I always stay with/honor any deal they bring to me. Would that dynamic be possible in the future?

 IN PA we have Exclusive and Non Exclusive Buyer Contracts. 

Exclusive contracts are timed contracts and whether or not the agent "bring" you the deal then you still owe a commission.

Non Exclusive are property based and more likely what is going to work best for you. You can stipulate in the contract specific property addresses or properties introduced to you by that agent for a given time frame. 

New contracts wont be available until August. 

Things will get interesting if the agent insists on dual agency and getting paid on both sides. There’s going to be sellers suing their own agents for refusing to work with independent buyers.

 The people who really suffer from this are the low downpayment/first time homebuyers who used to get representation for free. They can barley scrape up a downpayment let alone any commission...

This "news" really just protects the rich more than anything. 

just happened to my daughter in Vegas.. she normally works the Lux market so downpayment not an issue.. She took on someone from their gym who is a fHA buyer so they need closing costs.. Extra shows them a bunch of homes writes one up and seller will not pay a fee  they will give the closing cost but no fee.. Buyers have no money to pay my daughter. After much back and forth seller agreed to pay about 1/2 of a normal commish.. now she would have done it for free if she had to again based on the  relationship and how well she does in the industry but you can see how this will affect agents that really really need those commission to live and or stay in the industry..

Now for me and I did this back in the Carter years when rates where 18 to 20% and we had to do all sorts of financing magic.. I often just took my commissions on payments.. But again not every agent can affort to take payments for commish.. But it worked for me .. As I sold enough that I got full payment on to afford to do those types of deals and I can tell you I sold more RE than most in my market because I never let a deal fail because of downpayment issues.. Just a thought as you agents start to navigate the new rules.