What are you doing about the incoming market change? (NAR Settlement)

Question

As most of you know, the National Association of Realtors set a date of August 17th, if not sooner (depending on the state) to be the day that ALL states change the way buyers work with agents (somewhat). Reminder, who won in this scenario? The Lawyers! (They got paid!) Buyers now need legal representation before they can see a property with an agent and commission will no longer be advertised (In the Greater Cincinnati market it will still be standard for sellers to pay buyer broker commission)

I wanted to ask everyone who sees this, how are you changing anyway you are doing business (if you are)? Has your agent educated you on this yet? Do you know how agents get paid? Do you use an agent at all? What questions do you have regarding this topic?

Russell Brazil · Answer

The 3 states I work primarily in already require buyer agency agreements by state law. 50% of our deals are off market, so our commissions already got written into our offers as a standard operating procedure.

So virtually no changes for me.

Jay Hinrichs · Answer

now how am I doing this as a seller.. as I dont represent buyers and I only sell what I personally own.. we work in about 10 states so each one will be different..

In Oregon here in my new home project.. its a negotiation selling agent writes in their fee and we can accept or counter.  So on one for instance the buyer wanted 8k of upgraded floors the house was 850k  I countered  OK on the floors but But buyer had to pay whatever fee the buyers agent wanted. or no floors and we pay 1% to buyers agent.. they decided against the floors and to allow their agent the 1% .  now keep in mind that agent is getting to list their current 1.5 mil home.. so you can see its all going to be negotiations going forward.

Sam McCormack · Answer

I see what you are saying for going the attorney route, but in my experience they don't have your best interest in mind. Plus they charge by the hour, not the closing (unless there are attorneys who do that). As well as that, they don't have the experience realtors do, especially working with investors. That is odd to here about your buyer broker agreement having compensation before a closing even happens. I didn't know those exist. Make sure to at least ask your agent questions so you can be sure

Giselle Azcona-Lubbock · Answer

There are different forms of buyer agency agreement , including a non exclusive agreement in which you can work with more than one agent at a time , this is probably best for the investor. However it does allow the agent and brokerage to be protected incase of commission disputes, it sets apart specific addresses or territories in which this agent is working with you.

Keep in mind that everything is still negotiable

Walter Moneypenny · Answer

It is going to change the perception of buying a home in my opinion. Not a lot will change in the end, except more paperwork and some confused buyers and sellers. Commission has always been negotiable. The Phoenix Metro area MLS (ARMLS) implemented the new forms as of August 1.

Sam McCormack · Answer

Good to see it isn't affecting you much. I think people are blowing it out of proportion. 2, it will eliminate weak agents from markets (In my Opinion)

Walter Moneypenny · Answer

Arizona is one of the lucky states that does not need an attorney for closing. We are a Deed of Trust state and not a mortgage one. Education is the key!

Sam McCormack · Answer

Yes those do exist! I do one time showing agreements for a couple properties at a time, then once the investor understands how I work, I come back to talk more about getting an exclusive buyer representation agreement signed. I'm not sure how a lot of other agents work, but I don't show my fiduciary duties until I have an exclusive representation agreement signed. I will show my loyalty to you, as long as I get it back.

Terry Tokash · Answer

I just looked at my brokers contract and there’s no way I’m signing it. The wording is in such a way as to lock me into that broker for the duration even if I don’t use him. Also worded such that commisssion is earned upon entering into a contract to buy, not at closing. A couple other things I took issue with as well. That may not be the intent, but lawyers don’t care what intent there was. It’s supposedly the standard form the national association of realtors put out so everyone will use it. I’ll see if he’s willing to change it and I’ll look around, but as of right now, it looks like I may be just going the RE lawyer route to purchase. Read your contract carefully and I hope y’all’s are worded better than what I just saw.

What are you doing about the incoming market change? (NAR Settlement)

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