You may have heard about recent changes in the real estate laws. Numerous class-action lawsuits against the National Association of Realtors (NAR) have led to new agreements altering our business practices.
In California, Realtors are members of the California Association of Realtors (CAR). CAR attorneys draft our real estate contracts in compliance with NAR agreements. In some cases, California real estate regulations will also change. Our governing body is the Department of Real Estate (DRE).
Previous System of Compensation
Previously, when a seller was having an agreement with a broker, compensation was agreed upon for both the seller’s Realtor and the buyer’s Realtor. The idea was that the seller and seller’s broker would offer compensation to encourage the buyer’s agent to show the property. This compensation offer was listed in the Multiple Listing Service (MLS) to ensure the buyer’s agent got paid.
New Compensation Regulations
However, the new real estate laws have changed this system. Now, only the compensation to the LISTING BROKER (the broker representing the seller) will be specified in the listing agreement. It is against regulations to offer compensation to the buyer’s Realtor in the MLS. Instead, sellers may agree to “consider concessions,” which could include paying the buyer’s broker along with other possible concessions.
Broker-Buyer Agreements
Under the new real estate regulations, brokers must have a written agreement with a buyer before showing them any properties. In this agreement, the buyer commits to paying the broker if the seller does not cooperate. When offers are written, sellers are typically asked to pay the buyer’s broker, but the buyer’s broker’s request cannot exceed the amount agreed upon in the buyer-broker agreement.
Key Change in Real Estate laws, August 2024
1. Compensation in Listing Agreements:
- Now, only the listing broker’s compensation is specified in the listing agreement.
- It is now against regulations to offer compensation to the buyer’s Realtor in the MLS.
- Sellers may agree to “consider concessions,” which could involve paying the buyer’s broker or other concessions.
2. Written Agreements with Buyers:
- Brokers must have a written agreement with buyers before showing them any properties.
- In this agreement, the buyer commits to paying the broker if the seller won’t cooperate.
3. Seller’s Responsibility in Offers:
- When offers are written, sellers are typically asked to pay the buyer’s broker.
- The amount requested by the buyer’s broker cannot exceed the amount agreed upon in the buyer-broker agreement.
The changes in real estate laws in August 2024 have brought a significant shift in how business is conducted. While the transition could involve initial challenges, the industry’s adaptability and focus on education and clear communication can lead to positive outcomes. While negotiating, remember these key actions:
- Education is Key: Ensuring all parties understand the new laws is crucial. Real estate firms that invest in educating their agents and clients can have smoother transitions.
- Clear Agreements: Detailed and transparent buyer-broker agreements help prevent misunderstandings and set clear expectations for all parties involved.
- Flexibility and Creativity: The new laws encourage more creative negotiations, benefiting both buyers and sellers through tailored concessions.
- Ongoing Communication: Continuous communication and updates about the new regulations help maintain trust and clarity in real estate transactions.
If you’re a home buyer and you want to know how these changes affect you, here is a detailed guide on what the NAR settlement means for home buyers. And in case you’re selling a home, it’s essential to understand these changes about what the NAR settlement means for home sellers.
Why choose Realtor Emily Martin?
Emily has called California home for over a decade and likes to think of herself as a California “native”. Learning at a young age from her mother Linda K. Martin, a top-producing real estate agent for 40+ years, Emily has been immersed in Real Estate all of her life. As a homeowner in her early 20s in Manhattan’s Gramercy Park, followed by San Francisco, and now Healdsburg, Emily understands the intricacies of home ownership in highly sought-after regions such as Manhattan, San Francisco, Sonoma County, Napa Valley, and her beloved hometown of Healdsburg, California.
Whether you’re buying your dream home, purchasing a second home, selling a cherished property, or investing in the market, I’m here to make your dreams a reality. My extensive luxury experience, attention to customer experience, marketing expertise, hard work ethic, and passion allow me to provide a level of service that is truly distinctive. As we start our journey together, here’s what you can expect:
Unmatched Luxury Expertise
With a deep-rooted understanding of the luxury market, I bring a wealth of knowledge and insight into luxury goods, sales, and lifestyle. Whether you’re buying or selling, I have the expertise to navigate the world of real estate and the Healdsburg Luxury Homes market.
A Tradition of Excellence
With a family legacy spanning four decades in real estate, excellence is not just a goal, it’s a tradition. I am committed to upholding the impeccable reputation my mother, Linda K. Martin, a top North Shore Chicago agent, has built by delivering nothing short of excellence to my clients.
Unwavering Dedication & Passion
I am dedicated to your success. From the moment we embark on this journey together, I will provide unwavering support, guidance, and attention to detail, ensuring a seamless and stress-free experience. When asked to describe Emily, the first words that come up with my clients are passionate, energetic, experienced, and dependable.
Explore the Luxury Lifestyle in Healdsburg’s Wine Country
Luxury real estate is not just about properties, it’s about a lifestyle. It’s about finding the perfect blend of elegance, sophistication, and comfort that feels like you. It’s the feeling you get when you walk into your dream home.
Contact me today at: emily@luxeplaces.com or 707-385-9660 to begin your extraordinary real estate experience. Together, we’ll create a story worth telling, a life worth living, and a legacy worth building.