You know how they say, "This could have been a memo?" Well, this really should be a meeting.
But I am going to briefly and in the simplest terms possible explain the changes to United States real estate practices that start this week.
They are the biggest changes to our industry in 100 years and affected ALL buyers and sellers.
These new real estate terms are dictated by the Department of Justice and apply to everyone: all licensees who use any MLS anywhere in the country; all Realtor members, and every buyer and seller of residential property.
Beginning now, the commission signed in a listing agreement is only between the seller and the listing broker. It's not shared with the buyer's broker. There is nowhere in our updated listing agreements nationwide that even mentions paying a buyer's broker. That is done. That's over.
In order to see a property now, a buyer must first sign a legally binding Buyer Broker Agreement with a buyer's broker. That document is fierce. It lays out what the 1) buyer will pay the broker when escrow closes on a property, and 2) it states the "territory," if you will, that the agent/broker will cover for the buyer. In my case, it would say San Diego County.
The buyer also has five days from signing the agreement to provide to their agent ALL proof of funds for their down payment, closing costs and compensation payment AND show proof of financing.
If the buyer cannot or does not provide this information in five days, the agreement is considered cancelled. This agreement is for any buyer, including one who approaches the listing agent to work for them, too.
(And no buyer's agent will probably be willing to show you a property without the proof of funds stage completed.)
All MLS providers and platforms in the country have now removed any mention of "cooperating commission" to the buyer's broker because there isn't any. A listing agent can advertise that a seller may be willing to contribute towards a buyer broker compensation agreement between buyer and the buyer's broker.
But an amount or even willingness can't be advertised on the MLS. It can be advertised anywhere else on earth, and by any method, but not on the MLS.
Buyers can ask in their offer for the seller to contribute toward the buyer's broker's compensation. How the buyer's broker gets paid is now negotiated back and forth between buyer and seller.
If a deal is commenced but the seller will pay only part of the compensation, the buyer is legally obligated to pay the rest. And how much the buyer pays will be part of the fully executed residential purchase agreement, so everyone knows the buyer is paying and how much.
This information should be a meeting! There are a thousand questions, and I think Kerry and I have asked them all in our training over the past few months.
Oh, wait! There's more: OPEN HOUSES
Buyers will not be allowed to enter an open house without first signing a release stating that they know the listing agent is not their agent.
I could go on and on, but will leave it here. Please reach out for any and all questions, and I will do my best to assist you. In a call, I can explain why this happened. But it's here and now. This is done. And it's real.
Happy Real Estate to All.
Kimberly Dotseth, Broker and Owner, Blend Luxury Real Estate
California DRE License #01179760 Phone: (619) 261-1909
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