T minus 58 days until real estate as we know it changes.
That’s August 17, 2024.
This is when Multiple Listing Services (MLS) across the country remove information pertaining to compensation – commission – per the listing agreement with sellers. No longer will this disclosure be privy to buyer agents or their customers. From this date forward, buyer agents will need to call each listing agent to inquire if the seller is offering concessions to the buyer, and how much.
The irony is this: we thought the legal settlement with the National Association of Realtors (NAR) was to bring more transparency and disclosures to real estate transactions.
Well, it sure doesn’t seem like they accomplished that.
The On-Going Buyer-Broker Agreement Learning Process
As I mentioned last week, today I have more information to share on this. But to catch yourself up on what happened and how selling and buying real estate will change, read my previous essays here and here.
Two weeks ago I spent four more hours in another education class on “Understanding the Exclusive Buyer-Broker Agreement.” For short, the acronym is EBBA.
The 40-page handout can be summed up like this: more communication. Or shall I say, more documentation. That’t it.
There were pages talking about the duties of the buyer-broker agreement… duties of the buyers in a EBBA… the importance of these agreements (disclosure).
Then there were six pages on:
* Buyer Presentation Activities
* Pre-contract Activities
* Offer and Contract Activities
* Home Inspection Activities
* Tracking the Loan / Insurance Activities
* Appraisal Activities
* Closing-preparation Activities
* Post closing Activities
Nothing new there.
What’s NEW For The Buyer-Broker Agreement
The one step in the process that’s new is – negotiating and including in the buyer-broker agreement, language for compensation. It must be agreed upon up front. In writing. And explaining how the buyer-broker will be compensated.
It looks something like this:
* The Buyer-Broker Agreement offers includes the broker compensation to buyer at stated rate or percentage and presents all the work, activities they will do to represent the buyer
* Buyer negotiates / agrees
* Buyer-broker contacts listing agent to see if, how much, the seller is giving buyer in the form of concessions
* That figure is negotiated and confirmed
* At closing, buyer receives all amounts agreed upon up front with seller
* Buyer pays broker their compensation per their agreement made up-front
That’s it. I think.
Between now and August 17th, there will be hours and hours more broker education classes on how the buyer-broker agreement will roll out. Tenured agents like myself believe it’ll take the remainder of 2024 for the dust to settle on how we conduct this new way of business.
Us seasoned agents, and experts, believe this buyer-broker agreement, and new way of doing business, will eliminate a high number of agents across the country. It’ll be a lot more work for agents. A lot more communication, documentation and scrutiny by our local Multiple Listings Service’s (MLS’s).
And it’s the MLS’s are the one’s who will monitor compliance for the industry.
I’ll share the most current information with you as I learn about it between now and August 17th. Nothing has formalized, yet, and I’m sure there will be more iterations in the weeks to come…
(main photo: Water drops on my banana tree leaf after last weeks rain)
——————————————-
*** Happy Juneteenth today! Otherwise called “Second Independence Day”
*** Here’s my latest video about Delray Beach home prices falling
*** 20-inches of rain fell in a few days last week in parts of South Florida
—————————————–
*** South Florida’s Surging Supply Continues ***
* Last week there were 46,879 available…
* This morning’s Inventory is 46,832 *
… supply was FLAT last week
