It’s been nearly six weeks since our local Multiple Listing Service subscribers have been incorporating the new guidelines for Realtors as it relates to offers of compensation, as well as buyer representation agreements, and I’d venture to say it’s going just fine.
Many Realtors and consumers alike were unsettled about the unknowns, potential pitfalls or hiccups along the way, but I think everyone is adjusting just fine and, in our experience, it’s business as usual. In talking with scores of brokers working in the Rogue Valley, the common thread among those who aren’t seeing much push back is the awareness of the value professional real estate agents bring to the table. Whether it’s as a listing broker or the buyer’s broker, having a licensee involved in the transaction is valuable to the buyers and sellers.
When reviewing our revised listing agreements with sellers and having conversations about the options pertaining to offers of compensation, I have not had a single seller, not one, tell me they didn’t want to offer compensation to the buyer’s broker. Are they required to? No. Do we tell them what fee to offer? No. Nearly every one of them has asked what we think they should offer and when we recap the different offers of compensation being offered on the homes that are likely to be their competition and shown at the same time their home has shown, they are able to make an informed decision on what they want to offer to the buyer broker who will hopefully be bringing them a buyer. Ultimately, the decision is theirs.
In our experiences as of late, their focus has been less about what they are paying and more about the risks associated with not offering a fee and potentially soliciting an unrepresented buyer and how that may impact them. They are very uncomfortable with the idea of a buyer not having a voice of reason to guide them through the purchase process. Certainly, a buyer can choose to represent themselves but much like a plaintiff in a courtroom who opts to not have legal representation, is that really in anyone’s best interest? Every entity involved will be impacted.
Several of our sellers have even gone so far as to stipulate in their listing agreement that they are unwilling to show their home to or entertain an offer from an unrepresented buyer. They are uncomfortable with the idea with an unvetted buyer in their home. They are also uncomfortable being in escrow with someone who doesn’t have a reliable resource to guide them through the findings of the inspections, to decipher the nuances of the title report including the easements, covenants, conditions and restrictions, how to navigate the loan process including what if the home doesn’t make value in the eyes appraiser and how do they go about challenging it through the underwriting department.
Though change is never awesome, it is inevitable and the opportunities it has provided for even more thoughtful conversations has been welcomed by us. Navigating buyer representation agreements have opened up even more opportunities to articulate to our clients on the buying side, the level of service we provide. It outlines our commitment to them, as their representative as well as the expectations for all parties. In our office, we have three versions to choose from and the flexibility to utilize the contract that feels like the best fit for the client. The length of term as well as the fee is negotiable between the buyer and us and we have not only enjoyed but embraced the opportunity to memorialize the commitment we are making by also expecting when we are working with buyers.
It goes without saying, the changes aren’t everyone’s cup of tea and many real estate professionals have decided now is the time to hang it up. I imagine there are some who are trying to find a work around, though there isn’t one, others who are simplifying it, and in many cases leaving out valuable information but as we have always maintained, the way others do their business is not our business.
If you are interested in buying or selling or simply want to have an informed discussion about the changes in our industry, don’t hesitate to reach out. Relying on mainstream media, social media or even Uncle Bob’s interpretation of the new laws is reckless and irresponsible. Reach out to trusted professionals with a proven track record, known for their ethical practices and complete transparency.
