I like the Buyers Brokers Agreements. It’s something that finally protects Realtors against Realtor hopping Buyers and allows us to place liens on the properties they purchase. Time is money and when someone waste my time, they take money out of my pocket and out of my child’s mouth. I know longer have to worry about that with the Agency Agreement.
While initially thinking it was bad idea, I think it keeps buyers from being users. Users of our time and knowledge without hiring. I am seeing these new rules as beneficial to the industry as a whole. It makes the profession professional.
I am an attorney and I will tell you that before you submit an offer for a buyer where you expect the seller to pay a commission, you need to have a written agreement with your buyer that obligates them to pay you a commission if the seller doesn't otherwise you would be in a conflict of interest with your client. There is no reason to have an agreement before showing a property but without commission being offered in the MLS, you need a written agreement before submitting an offer.
@agame4146 we submit an offer of compensation with the offer. In CA we will know if the seller is paying compensation before escrow is opened. Pur buyer agreement has a part where buyers acknowledge that if they don't have money to pay for our services, then they'll be limited to only properties where the seller are paying BAC.
The reason they want it before you show a property is so that your commission does not change after they see the property and want to make an offer. The attorneys for the plaintiffs believe that agents will steer their buyers to properties offering higher commission (let's just say direct compensation from seller to buyers agent so as to not get pulled offsides in a secondary issue). With the commission set before entering a property, and no legal way to change that commission up (please see page 41 of the plaintiffs filing last week) it does not matter what the seller is offering the buyers agent, the buyers agent is paid the same, therefore the buyers agent will not steer towards the property with the higher compensation. That's the reason.
Yes, there is a reason to get a written agreement before showings: so you don't start working with zero guarantee of compensation. A buyer can cut their agent out after they find the home they like. Negotiating your commission after the buyer finds the home they like is foolish.
NAR should be required to divest any and all interest in any MLS. Neither NAR or a MLS should determine how brokerage agreements are structured or implemented. We have law that guides us on these principles.
I maybe odd man out. I prefer a buyer broker everytime - 20 years explaining to the buyer this form is my employmnet contract. We can do it for hours - day - timeframe. I felt its a very important part of being professional. If someone one allow a commitment for a time frame they are comfortable with then Im just gambling my time. I prefer to work with commitments.
A lot of agents prefer it but it creates a problem for the consumer having to sign one before they see any home. It’s all about the consumer according to the DOJ
The requirement for an agreement before showing needs to go away and the CA contract needs to be changed. The current check box to transfer the buyers obligation needs to be changed to “Seller agrees to pay buyers broker X amount.”
It's a mixed bag because with the commission rules changed showing houses without an agreement means you can show a bunch of houses and then they can go run to a discount broker and write an offer. Which would likely be the case if they got to a house that was not offering compensating commission. You have 3 houses they want to see and you find out one is not offering compensation. With a limited BRBC they could opt out of you showing that one and then make another choice. Don't know that this is a good thing or not other than a way to start a relationship with a new client and then present them with a BRBC if they want to continue working with you. Buyers agents are going to have to do a lot better in the new environment to get clients. I am already seeing new discount fixed price entities springing up to take advantage of the new rules.
The bigger picture is that the large listing brokerages are trying to eliminate buyers broker representation. It is their goal to make sure that ONLY the listing agent is being represented so that they can control the transaction, similar to how auto dealerships control the flow of a transaction.
I am already seeing agents that are no longer part of NAR having more success with buyers because there is no required BAA. That silly requirement has gotta go!! That being said, I still use them because I require exclusivity. But to REQUIRE that someone sign it before I even show them a house is ridiculous.
@brianfitzrealty if the buyer is serious they can do it just for that specific property. They can do a non-exclusive deal. This has been the practice by some agents before the settlement. This keeps buyers serious.
The NAR Settlement pertains to Realtors, not independent agents. So, consumers still have a choice. However, state laws like CA AB 2992 require all licensees to have buyer representation agreements. In these states, consumer don't have a choice. If the DOJ has a problem then it needs to take it up with the states that require this for all licensees.
The new rule isn't in effect until January, and we were told to follow the NAR guidelines over CA guidelines. The CA law states that you must have it as soon as possible or something to that effect, but you must have it prior to signing an offer. That's the discussion we had in our office meeting last week. Thanks, Tristan, for the info.
California has a new law going into effect 1/1/25 requiring one to be signed as soon as practicable - and prior to or at the first showing is clearly practicable.
I don't like the required BBA agreement before showing any homes. But at the same time with the other rules in place and no co broke being offered in mls, you have to establish your fee or risk showing homes and not getting paid if they decide to put an offer in on it. After seeing it they could decide the don't care or want to make sure you get paid or agree on what your fee would be, could go to another agent to write the offer or directly to the listing agent. So many things that need to be addressed.
6:24 Retired Realtor here. I can promise you that 99.9 % of all buyers will balk at the idea of signing any commitment whatsoever before they’ve even looked at a property. As a result of this, the Realtors who are willing to skirt the law to make the customer feel comfortable will be getting more buyers. This law will give an advantage to the risk-takers & the rule-breakers. It doesn’t benefit anyone!
Active Realtor here. Buyers aren't locked in to an agent/broker if they feel the service doesn't meet their needs, then theBBA can be canceled. I think it helps cut down on lookie loos, and it forces agents to have that consultation and build that relationship, which then signing an exclusive representation agreement will be easy.
I did have a challenge with one customer because he falsely told me he wasn't working with other agent. Once It was time for him to sign that agreement for me to show the property on a Sunday afternoon, he refused. I have another customer who wasn't familiar with the change and he was hesitant. However, as I explained the reason and literally answered his concerns, he and his wife signed the agreement. We are closing on their home this week. Nobody likes going through this process but, I do what is within the legal realm and not skirt my responsibilities. It's not worth me getting fined or losing my license. I make sure that my potential customers know that I am not going to hold anyone hostage to work with if they don't want to.
I have several comments: Yes, I agree that it could be harmful to buyers if they have a bad Realtor who doesn't know what they are doing or who are steering, we've seen too much of that already and good riddance to those agents. On the flip side, and I'll speak for Texas since we are not a dual agency state: it is protective for both buyer and Realtor in that the agreement is laid out and in writing and is a contract and provides full representation or the representation that is agreed upon is understood. Secondly, it helps protect the seller/listing agent in the event the buyer's agent misrepresents the property as now the seller and their agent have written documentation of that relationship (most companies do not require a signed buyer's rep prior to paying commission). I also assert that the buyer can interview multiple Realtors and make an educated decision just like a seller can. The listing agreement can be terminated just as well as a buyer's rep agreement, otherwise, those documents wouldn't exist. Finally, we don't work for free so it is protective to both parties outlining the payment/fees and who is responsible as well as the duties performed. I've seen too many Realtors in the past not have a representation agreement signed and spent wasted time - bad on them for not having a process. There is due diligence required on both sides, whether it is Realtors or buyers/sellers.
I like the idea of removing compensation from the representation entirely but the problem is that’s based on the accepted practice that the seller intends to offer a compensation. In a strong seller’s market and with the advent of Zillow we risk becoming irrelevant unless our offerings meet or exceed Zillow. With buyers not bound by agreement to an agent that may or may not provide exceptional value that actually elevates the industry and makes the offering of the individual agent much more significant. On that point, this is a very good thing. I think it will dramatically raise the level of competition among agents and that’s a good thing for consumers. However, call me jaded if you must but I think most agents will not rise to this occasion and we know without doubt that the buyers will not hold them to a meaningful standard. I fear we may end up in a situation where the internet portals with those ease of access to data and huge marketing budgets wind up crushing the local realtor. This would cause a net negative offering for the consumer.
@DawnMcSweyn laugh it up. With out a doubt, professionals in the real estate industry that have yet to be red pilled are hands down among the absolute dumbest people on the planet.
I like the Buyers Brokers Agreements. It’s something that finally protects Realtors against Realtor hopping Buyers and allows us to place liens on the properties they purchase.
Time is money and when someone waste my time, they take money out of my pocket and out of my child’s mouth. I know longer have to worry about that with the Agency Agreement.
While initially thinking it was bad idea, I think it keeps buyers from being users. Users of our time and knowledge without hiring. I am seeing these new rules as beneficial to the industry as a whole. It makes the profession professional.
I agree. Buyers shouldn’t be forced to sign anything just to see a house. Sounds absurd. Thanks for the video 😊
I am an attorney and I will tell you that before you submit an offer for a buyer where you expect the seller to pay a commission, you need to have a written agreement with your buyer that obligates them to pay you a commission if the seller doesn't otherwise you would be in a conflict of interest with your client. There is no reason to have an agreement before showing a property but without commission being offered in the MLS, you need a written agreement before submitting an offer.
The entire reason for the nar settlement is to say everything is negotiable. Buyers have no legal obligation to sign any contracts.
@agame4146 we submit an offer of compensation with the offer. In CA we will know if the seller is paying compensation before escrow is opened. Pur buyer agreement has a part where buyers acknowledge that if they don't have money to pay for our services, then they'll be limited to only properties where the seller are paying BAC.
The reason they want it before you show a property is so that your commission does not change after they see the property and want to make an offer. The attorneys for the plaintiffs believe that agents will steer their buyers to properties offering higher commission (let's just say direct compensation from seller to buyers agent so as to not get pulled offsides in a secondary issue). With the commission set before entering a property, and no legal way to change that commission up (please see page 41 of the plaintiffs filing last week) it does not matter what the seller is offering the buyers agent, the buyers agent is paid the same, therefore the buyers agent will not steer towards the property with the higher compensation. That's the reason.
Yes, there is a reason to get a written agreement before showings: so you don't start working with zero guarantee of compensation. A buyer can cut their agent out after they find the home they like. Negotiating your commission after the buyer finds the home they like is foolish.
@@jdm894g If a buyer can't afford to pay your commission they should not be hiring an agent nor home shopping for that matter.
NAR should be required to divest any and all interest in any MLS. Neither NAR or a MLS should determine how brokerage agreements are structured or implemented. We have law that guides us on these principles.
@OtisHumphreys state association, at least in CA provide documents that will hold up in court.
I maybe odd man out. I prefer a buyer broker everytime - 20 years explaining to the buyer this form is my employmnet contract. We can do it for hours - day - timeframe. I felt its a very important part of being professional. If someone one allow a commitment for a time frame they are comfortable with then Im just gambling my time. I prefer to work with commitments.
A lot of agents prefer it but it creates a problem for the consumer having to sign one before they see any home. It’s all about the consumer according to the DOJ
@@TristanAhumada the representation is going to be for that specific property. You know the CA forms have options for buyers.
The requirement for an agreement before showing needs to go away and the CA contract needs to be changed. The current check box to transfer the buyers obligation needs to be changed to “Seller agrees to pay buyers broker X amount.”
It's a mixed bag because with the commission rules changed showing houses without an agreement means you can show a bunch of houses and then they can go run to a discount broker and write an offer. Which would likely be the case if they got to a house that was not offering compensating commission. You have 3 houses they want to see and you find out one is not offering compensation. With a limited BRBC they could opt out of you showing that one and then make another choice. Don't know that this is a good thing or not other than a way to start a relationship with a new client and then present them with a BRBC if they want to continue working with you. Buyers agents are going to have to do a lot better in the new environment to get clients. I am already seeing new discount fixed price entities springing up to take advantage of the new rules.
The bigger picture is that the large listing brokerages are trying to eliminate buyers broker representation. It is their goal to make sure that ONLY the listing agent is being represented so that they can control the transaction, similar to how auto dealerships control the flow of a transaction.
I didn't think about this, but you are so right. Thank you for your comment.
Thanks!
Welcome!❤❤❤❤
I am already seeing agents that are no longer part of NAR having more success with buyers because there is no required BAA. That silly requirement has gotta go!! That being said, I still use them because I require exclusivity. But to REQUIRE that someone sign it before I even show them a house is ridiculous.
Yup!
@brianfitzrealty if the buyer is serious they can do it just for that specific property. They can do a non-exclusive deal. This has been the practice by some agents before the settlement. This keeps buyers serious.
Signing an agreement before the buyer tours the home in my opinion is extremely harmful, I also believe it destroys the same day showing requests
The NAR Settlement pertains to Realtors, not independent agents. So, consumers still have a choice. However, state laws like CA AB 2992 require all licensees to have buyer representation agreements. In these states, consumer don't have a choice. If the DOJ has a problem then it needs to take it up with the states that require this for all licensees.
The new rule isn't in effect until January, and we were told to follow the NAR guidelines over CA guidelines. The CA law states that you must have it as soon as possible or something to that effect, but you must have it prior to signing an offer. That's the discussion we had in our office meeting last week. Thanks, Tristan, for the info.
This is true.
2024, Indiana signed into law that a Buyer Representation agreement must be signed prior to showing a property to a prospective buyer.
California has a new law going into effect 1/1/25 requiring one to be signed as soon as practicable - and prior to or at the first showing is clearly practicable.
I don't like the required BBA agreement before showing any homes. But at the same time with the other rules in place and no co broke being offered in mls, you have to establish your fee or risk showing homes and not getting paid if they decide to put an offer in on it. After seeing it they could decide the don't care or want to make sure you get paid or agree on what your fee would be, could go to another agent to write the offer or directly to the listing agent. So many things that need to be addressed.
6:24 Retired Realtor here. I can promise you that 99.9 % of all buyers will balk at the idea of signing any commitment whatsoever before they’ve even looked at a property. As a result of this, the Realtors who are willing to skirt the law to make the customer feel comfortable will be getting more buyers. This law will give an advantage to the risk-takers & the rule-breakers. It doesn’t benefit anyone!
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Active Realtor here. Buyers aren't locked in to an agent/broker if they feel the service doesn't meet their needs, then theBBA can be canceled. I think it helps cut down on lookie loos, and it forces agents to have that consultation and build that relationship, which then signing an exclusive representation agreement will be easy.
Active agent here. Sold 28 homes this year. I work more listings but I’ve only had one buyer not sign and I didn’t show. So, 11 buyers have signed.
Exactly!! This has happened to me several times recently with new buyer leads. Despite my detailed buyer presentation and consultation.
I did have a challenge with one customer because he falsely told me he wasn't working with other agent. Once It was time for him to sign that agreement for me to show the property on a Sunday afternoon, he refused. I have another customer who wasn't familiar with the change and he was hesitant. However, as I explained the reason and literally answered his concerns, he and his wife signed the agreement. We are closing on their home this week. Nobody likes going through this process but, I do what is within the legal realm and not skirt my responsibilities. It's not worth me getting fined or losing my license. I make sure that my potential customers know that I am not going to hold anyone hostage to work with if they don't want to.
Didn't it also say they didnt like the advertisement of compensation in other places? I.e. websites, social media etc.
@@Dee-gj7kf yes
I have several comments: Yes, I agree that it could be harmful to buyers if they have a bad Realtor who doesn't know what they are doing or who are steering, we've seen too much of that already and good riddance to those agents. On the flip side, and I'll speak for Texas since we are not a dual agency state: it is protective for both buyer and Realtor in that the agreement is laid out and in writing and is a contract and provides full representation or the representation that is agreed upon is understood. Secondly, it helps protect the seller/listing agent in the event the buyer's agent misrepresents the property as now the seller and their agent have written documentation of that relationship (most companies do not require a signed buyer's rep prior to paying commission). I also assert that the buyer can interview multiple Realtors and make an educated decision just like a seller can. The listing agreement can be terminated just as well as a buyer's rep agreement, otherwise, those documents wouldn't exist. Finally, we don't work for free so it is protective to both parties outlining the payment/fees and who is responsible as well as the duties performed. I've seen too many Realtors in the past not have a representation agreement signed and spent wasted time - bad on them for not having a process. There is due diligence required on both sides, whether it is Realtors or buyers/sellers.
You make great points. Let's see how this evolves now.
I like the idea of removing compensation from the representation entirely but the problem is that’s based on the accepted practice that the seller intends to offer a compensation. In a strong seller’s market and with the advent of Zillow we risk becoming irrelevant unless our offerings meet or exceed Zillow. With buyers not bound by agreement to an agent that may or may not provide exceptional value that actually elevates the industry and makes the offering of the individual agent much more significant. On that point, this is a very good thing. I think it will dramatically raise the level of competition among agents and that’s a good thing for consumers. However, call me jaded if you must but I think most agents will not rise to this occasion and we know without doubt that the buyers will not hold them to a meaningful standard. I fear we may end up in a situation where the internet portals with those ease of access to data and huge marketing budgets wind up crushing the local realtor. This would cause a net negative offering for the consumer.
Doesn’t Zillow have a honeymoon thing they offer buyers? Try out an agent
I’d love to hear thoughts on this by Rob Hahn.
"Went to law school, didn't finsih " is my story too....Univ. of Cincinnatti.....we got pregnant...
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Hopefully with Trump and common sense party in power they'll get rid of this entire piece of garbage legislation.
Bwahahahaha
@DawnMcSweyn laugh it up. With out a doubt, professionals in the real estate industry that have yet to be red pilled are hands down among the absolute dumbest people on the planet.