New Rules in Real Estate

What is happening in Real Estate at the moment?

As y’all know there has been some law suites in the Real Estate industry which led to all kinds of new rules and regulations which affect all buyers and sellers.

What does this mean for buyers?

What I am about to tell you will seem to be nothing new, but at the same time there are some changes and it’s very important as these rules are in affect as of 17 August 2024.

No home can be shown without a buyer’s representation agreement or at least a showing agreement in place. This needs to be signed between an agent and a prospective buyer. So don’t be surprised when you find a house on the Coldwell banker website, or any other home website, and click that button for an agent to show a home, and he/she calls you to tell you that you need to either meet up first to discuss the new regulations and your options. Another scenario may be that they meet you at the property and insist you sign a piece of paper before opening the door.

Now this is not anything to be concerned about, because in my opinion this is for your own protection and transparency as well as the showing/buyer’s agent. My suggestion is to meet up and decide if you would like the specific agent to represent you. This however does not need to be a final decision as you will have a choice to use that agent for only one property, or 1 day or however many properties or days/months you prefer as per the specific agreement you sign with the agent. You can also terminate the agreement if you find that the agent is not up to scratch.

Get the meeting scheduled, and let the agent explain the details of how this will work.

While this covers the agent showing you homes, the making of an appointment to show may take a little longer than before as the compensation for buyer/Tenant agents are no longer shown on the MLS as before, and a buyer’s agent will need to get verification of this, before being able to show the home. The time from requesting a showing to actually showing the property, will depend on how quickly a seller’s agent reply and give written confirmation of commission or compensation to a buyer’s agent. This is important as you as a buyer may be responsible for paying the buyer agent’s commission or making it whole, so you will want to know how much that will be if you make an offer.

Contacting the listing agent directly.

Buyers should not work with the listing agent directly. As the listing agent has an agreement in place to represent the seller, it is my opinion that he/she will not represent you to the best of their ability.

Why, you may ask?

The reason is, because the listing agent has a fiduciary obligation to get the seller the best offer/most money for his property and where does that leave you as a buyer being represented by such an agent…. You have the right to representation as well!  Best get yourself a buyer’s agent with good negotiating skills that will look after you!

Now, if you want to use the listing agent to avoid signing any documents before looking at a home, you will be disappointed again, because he/she will also need to make you sign a document which will give him/her intermediary status to represent both buyer and seller.

Looking at the seller side

Sellers may think they are lucky because they have the option to not pay a buyer’s agent at all, but digging a little deeper…How beneficial will this be for the seller when they potentially lose half the buyer pool because buyers opted out of looking at homes where the seller doesn’t pay the buyer’s agent. My advice would be to offer to pay the buyer agent as before and get all buyers out there to have a look at your property. If not, your home may be in the market for much longer than anticipated and I don’t need to go into details regarding money lost because of mortgage payment etc.

What it all boils down to.

Buyer and sellers…. Get yourself a good RE agent to represent you and educate you on the new rules and regulations so you don’t miss out on any repercussions for making the wrong decision.

As always, I’ll be happy to help, so please don’t hesitate to contact me.

PS – These new rules are not set in stone and can still change at any time.