Winston Salem | Home Sellers: Here's What the NAR Settlement Means for You

As a home seller, you have a wide range of choices when it comes to listing your home. Agents who are REALTORS® are a trusted source of advice and stand ready to help you navigate this complex process and make the choices that work best for you. NAR’s recent settlement has led to several changes related to broker commissions that benefit sellers, and we wanted to clearly lay them out for you.

Here is what the settlement means for home sellers:

• You still have the choice of offering compensation to buyer brokers. You may consider doing this as a way of marketing your home or making your listing more attractive to buyers.
• Your agent must conspicuously disclose to you and obtain your approval for any payment or offer of payment that a listing broker will make to another broker acting for buyers.
• This disclosure must be made to you in writing in advance of any payment or agreement to pay another broker acting for buyers, and must specify the amount or rate of such payment.
• If you choose to approve an offer of compensation, there are changes to how this can happen.
• You as the seller can still make an offer compensation, but your agent cannot include it on a Multiple Listing Service (MLS)—MLSs are local marketplaces used by both buyer brokers and listing brokers to share information about properties for sale.
• Your agent can advertise your listing via off-MLS platforms such as social media, flyers and websites.
• You as the seller can still offer buyer concessions on an MLS (for example, concessions for buyer closing costs).

These settlement practice changes went into effect August 17.

Here is what the settlement doesn’t change:

• Agents who are REALTORS® are here to help you navigate the process of selling your home and are ethically obligated to work in your best interest.
• Compensation for your agent remains fully negotiable, and if your agent is a REALTOR®, they must abide by the REALTOR® Code of Ethics and have clear and transparent discussions with you about compensation. When finding an agent to work with, ask questions about compensation and discuss what you would like to offer buyers.
• You have choices. Work with your agent to understand the full range of these choices when selling your home, which will help you make the best possible decision for your needs.

More details about these changes and what they mean can be found at NAR Settlement: Get the Facts.

Winston Salem | Home Sellers: Here's What the NAR Settlement Means for You

 

As of August 17, 2024, the Multiple Listing Service (MLS) will no longer allow listing agents to include offers of compensation for a buyer's agent in their listings. This change is intended to address claims that homeowners were forced to pay inflated agent commissions. 

 

Here are some other things that are not allowed in the MLS regarding commissions:

• Total commission disclosure: The MLS cannot require listing brokers to disclose the total negotiated commission in their listing contract.
• Total commission publication: The MLS cannot publish the total negotiated commission on a listing. 
   

However, sellers and listing agents can still agree on the amount of the commission outside of the MLS. This can be done verbally, in emails or texts, or on the listing agent's brokerage website. 

 

The new rules are intended to decouple the buyer fee from the seller fee. This means that the total amount paid may come from the buyer or the seller, and each commission will be negotiated. 

 

Winston Salem | CONSUMER GUIDE: OPEN HOUSES AND WRITTEN AGREEMENTS

 

As of August 17, 2024, many real estate professionals nationwide will be asking buyers to enter into a written agreement prior to touring a home. But what if you are just attending an open house? Here’s what you should know:

I am attending an open house without an agent. Do I need a written buyer agreement in order to tour the home?

No. If you are simply visiting an open house on your own or asking a real estate professional about their services, you do not need to sign a written buyer agreement.

Is an agent who is hosting an open house required to enter into written agreements with the potential buyers who attend the open house?

No. In this case, since the agent is only there at the direction of the listing broker or seller, the agent is not required to have a written agreement with the buyers touring the home. When will I be asked to sign an agreement with an agent? After you begin “working with” an agent and at any point before you tour your first house together.

 What does “working with” an agent mean?

A buyer is “working with” an agent as soon as the agent begins to provide services, such as identifying potential properties and arranging tours. Agents who are simply marketing their services or speaking to a buyer—at an open house or by providing a buyer access to a house they have listed—are not considered to be working with the buyer.

 What does it mean to “tour” a home?

Under the terms of the settlement, a “tour” is when a buyer who is working with an agent enters a home that is for sale or directs their agent to enter the home on their behalf. This includes when the buyer’s agent provides a live, virtual tour to a buyer not physically present.

What is the purpose of written buyer agreements?

Clarity and transparency. Written buyer agreements lay out the services your real estate professional will provide and what they will be paid. Buyers should not sign anything that includes terms they do not agree with or do not understand. You are in the driver's seat with these agreements, which are fully negotiable.

Where can I learn more about buyer agreements?

NAR has created a dedicated resource on written buyer agreements here.

Please visit NAR Settlement: Get the Facts for more information and resources, and consult your real estate professional or attorney for details about state law where you are purchasing a home

Winston Salem | An Agents Take on offering of compensation in the MLS

 

On this week's episode of Real Estate Insiders Unfiltered, California agent Chris Cragnotti shares his experience working with sellers who chose not to include an offer of compensation in the MLS, 10 months before it was required. He describes the conversations he's had with clients, the responses of buyer agents and how the deals went down.  

See why eliminating upfront offers of comp is 'nothing to be afraid of': Many agents are just starting to talk with clients about industry rule changes, but Cragnotti has been doing it since November. After the Sitzer/Burnett verdict was announced, "we knew what the DOJ wanted," he said. 

So how did sellers react? His first conversation was "super easy." Transparency and education have been key.

"I realized that I had a fiduciary obligation to explain to my sellers that this pathway existed, that not only do they not have to offer compensation, but the buyer can can now ask them in the purchase agreement. And I explained to every one of my sellers, you're very likely going to be asked to pay compensation, and I think it's a great insurance policy. They should have their own representative. It protects you, it protects me. It's better and it's worth your money to do it. You can still say no. You'll be able to negotiate it."

Were buyers (or their agents) scared away? Removing an offer of compensation has not impacted Cragnotti's business or his sellers. All of his recent listings have sold — many for above asking — and the change, he said, has ultimately been "a big nothing."

"What I think all the other agents gleaned from the experience was that, oh, it's just an extra a piece of paper we have to do. It's a conversation I have to have with my buyers now, a conversation we probably should have been having all along anyway. But at the end of the day, you know, it's just really easy and it will become easier."

Winston Salem | Your Listing Agents Directive

 

In real estate, a fiduciary is an agent who has a legal obligation to act in the best interests of their clients, rather than their own. This is known as a fiduciary duty. The National Association of REALTORS® created an acronym to help real estate agents remember the key points of fiduciary duty, which is "OLD CAR": obedience, loyalty, disclosure, confidentiality, accounting, and reasonable care and diligence.

Starting August 17th, buyers will meet with an agent and sign a buyer representation agreement before seeing a property on the MLS, laying out the terms of that engagement including the compensation the agent will be paid for those services. We all know that buyer agent compensation will vary from agent to agent, market to market, company to company, etc. With that in mind, as a listing agent, acting as fiduciary to your seller, why would you in advance of an offer from the buyer, advertise what your seller is willing to pay in buyer agent compensation or concessions, knowing that every buyer's financial situation is different, and what they agreed to pay their buyer's agent might be different as well? You're literally telling a buyer what your seller is willing to give up to make a deal come together in advance of an offer. This "might" make some sense in a buyer's market, but certainly not a "normal" or "seller's market". I bring this up because I've had two lawyers now tell me, breach of fiduciary duty claims could rise against listing agents, if they continue to advertise specific amounts for offers of compensation or concessions in advance of an offer, "potentially" resulting in the seller leaving money on the table.

The best approach going forward for everyone is simply this: "Seller is willing to entertain any and all requests, put it in your offer". Let the offer dictate your response and strategy for putting a deal together with the buyer. If a buyer's agent calls you and asks if your seller is offering compensation or concessions, simply state: "Our seller is willing to entertain any and all requests from your buyer, please just put them in your offer". What if the offer includes amounts significantly less than what your seller was willing to offer in compensation or concessions in advance? Let the buyer request what they want or need to put a deal together. It's a negotiation... LET THEM MAKE THE FIRST MOVE!

Contact me and I will explain this new confusing process.   

Winston Salem Property Management - How often do Owners want to communicate with us

Carolina Living Real Estate and Property Management researches what owners want and tailor our services to match their needs.   Below is a list of questions we answer with our owners.

Rental owners want you to make your relationships with them a priority.

And in a time when competition is steep and rental owners are highly cost-conscious, good communication is crucial in proving your value.

So, how do rental owners want to communicate with you? That’s what we’ll cover in this post.

1. Find Out Which Info Owners Want, and When

First, find out which information your owners want to receive from you, and on what schedule.

Within our survey, rental owners told us they want to receive the following updates from their property management team:

• Updates on renters and vacancies – 55% would like to receive this information as soon as it’s available
• Maintenance and repair records – 49% want this information whenever it’s available, or at least once a month
• Accounting and financial statements – 65% want to receive these on a monthly basis

2. Mix in Personalized Communications

Next, supplement monthly statements with more personal communications.

Many owners told us they appreciate hearing about their properties outside of monthly reports, and in ways that feel more personalized than a standard email.

3. Acknowledge Receipt of Messages

Be sure to acknowledge messages you’ve received, even if you don’t have a solution to share just yet.

In our survey, owners made clear that what matters most to them is knowing you’ve seen their message and have taken action on it, even if you’re still working on a solution.

4. Plan Ahead for Emergencies

Next, establish how your owners would like you to communicate in the event of an emergency.

Email may work for more routine communications, but when an emergency arises, a phone call might be more appropriate.

Winston Salem | Your Real Estate Advisor for Life | Roby Robertson

Anyone can offer a general opinion on a remodeling project or major landscaping job. An advisor with the experience and acumen of a REALTOR® will provide the clarity and direction few others can. All they need to do is ask the client the right questions to get to the perfect solution. They are the trusted friend with your best interest at heart, the wall off which you bounce ideas. REALTORS® don’t know everything, but they know that together, you can accomplish anything with perspective and experience.

 Contact me to gain advise on new Realtor compensation rules.  (see sidebar or call 704-fourfiveone-7051