Buyers signing contracts to just view homes for sale is now mandatory
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Buyers signing contracts to just view homes for sale is now mandatory
Connor with Honor - August 22, 2024** Tags: [real estate](/-/Blog/tag/real estate), [connor with honor](/-/Blog/tag/connor with honor), [santa clarita](/-/Blog/tag/santa clarita), [homes for sale](/-/Blog/tag/homes for sale), [top agents](/-/Blog/tag/top agents), news ** 0 Comments | Add Comment
In real estate, some changes involve what a home buyer will sign to view homes.
This stemmed from a judgment against the National Association of Realtors and is supposed to clear the waters and protect home buyers and sellers better.
Some considerations for home buyers. Now that this is a rule and you may have found a real estate agent willing to show you homes without any buyer-broker contract, you should throw caution to the wind - so pucker up buttercup!
My X-Cop mind thinks this way, “If that real estate agent is willing to sacrifice their license in order to show homes because they don’t agree with the decisions handed down by the court, I’m wondering what other things they may sacrifice? Will they sacrifice me?”
Are you reading what you are signing? I know this seems like the way it should be. But lately, I received a call where the caller stated they signed something to view a home with another agent, but they are not sure what they signed and don’t have a copy. The called because they don’t like said agent and want to hire me :) - Ok, no BS, seriously.
However, the fact that they need to know what they are signing and sign anyway can be a problem. If the agent states in the contract that they are going to be your sole representative for the next 90 days, then there may be a problem firing them. In my world, if I have a client who is displeased with me and my services, I’d happily let them exit any and all contracts, as long as it did not create a bind for them, such as the case if a home seller were in escrow with a buyer, they’d need the buyer’s approval to cancel in that regard.
But, in most cases, the cancellations of the buyer contracts are not that “spicy” when done correctly between the buyer and the agent they don’t want to work with any longer.
Another item to note is that there are the ways in which the contract, the buyer’s broker agreement, limits properties to be included as part of that specific agreement between you and your real estate agent. You can select a single viewing of a particular home. You can select only homes located in Valencia, CA; for the areas of Saugus and Stevenson Ranch, you can exclude those. You can say that only Santa Clarita real estate and homes are to be included - but specificity is going to be your friend in this regard.
You can also have the contract reflect certain property types. Maybe you want a condo specific agent to help you in that property type, and for single family homes you want to select an agent that has a speciality in those.
What you will be paying that agent is also going to be included.
Yes - that’s the new one - what are you paying that real estate agent on the contract, the buyer brokers agreement, to represent you? (Not really new - as I will get into the buyer broker agreement as been - just not used very much because of most sellers paying the buyer broker’s fee in the past)
In the past, the real estate agent could typically depend on the seller having agreed to a particular commission to represent you.
Now - that’s the change, folks. In some circumstances, that will still be the case. I’d propose that this will be they way it’s been in the majority of cases, it will be business as we have always conducted, with the addition of the buyer broker agreement being implemented.
For the record - the buyer broker agreement, in some form, has always been. I have met many agents that only showed homes, before the mandatory changes, with a signed buyer broker agreement. They said it’s important and today they are well ahead of the curve being able to show their value.
Where does that leave you? When you are buying a home, you will have closing costs. Those are the things that are on top of the home price you are offering. Such as your lender’s fee, your part of the title fee and your part of the escrow fee’s. That’s about 3%, depending - you will need to get the ‘breakdown’ before moving forward with an offer. You will do this, as my buyer do per my request with them being cc’d on the request, with a fictional home. But based on the number that they have been approved for, or the number they are willing to go with regard to making an offer.
That way, they know what they are getting into, exactly. And I love precision. Ask me on a good shooting day!
There is only so much money that can be applied or given as closing costs from a real estate lender. It depends on the loan type and the lender type. (fha and VA have strict limits, conventional loans - the varied down payment types also have limits - cash - well - that limit is all up to you.
That may be one of the changes that we will start to see, where the lenders will allow for more in the way of closing costs to start being applied to the buyer’s agent’s fee. (this hasn’t happened yet - but time will tell if real estate sales slow down as a result of the changes)
Today, you may have to also pay your buyer’s agent. Here is a doozie that other agents don’t want to address - the proverbial elephant in the room, “Why don’t I just use the agent who the seller is paying to represent them in the sale of the home?”
I’ve got an idea - sounding harsh - why don’t you hire the attorney that is also representing those who were the nexus of the suit against you? Because it’s a conflict of interest. Does that apply to a real estate sale? Not in all the states and not in all countries. California, currently, it completely legal. Just because something is legal does not mean it’s a good idea.
You can, but they will then become your buyer’s agent in something known as “dual agency”. They represent the seller and now you. In that circumstance, if the seller is not willing to pay a buyer’s agent, then you will have to pay the seller’s agent to represent you.
It’s not about fair, it’s about what the changes are presently. There are several states that don’t allow for “dual agency”. The scenario where the home seller is also representing the home buyer on the same home, that’s dual agency. It’s legal in California (not CA - Canada), and there is a page of super small print explaining all of the nuiances and what it’s about.
When it takes that much text to explain a document you are going to be singing, such as the one that talks about Dual Agency, when a relationship is formed between you and your agent, my thought is to really take that decision seriously.
If the seller is going to pay their agent to be your agent, they would be willing to pay your agent also. If they aren’t and the monies are the same, I would think there is something that someone “knows” that they maybe trying to hide from the buyers and their agent is a part of it. (again - the trust thing is a problem for me - on all levels.) IMHO!
How about you? Will you be willing to pay your agent to represent you and how much will you pay? Will you go with the 3%, or 2.5% or less or more? Look at your financial profile, look at the property and if the seller is not paying, my job is negotiation. Let me ask within the offer for the seller to include my fee in their closing costs. Then we can take it from there.
Part of the negotiaton is to have your agent get their representaiton fee paid by the seller. That is going to depend on how much value I can earn in the process of representing you.
There are more than one way to buy a home and to negotiate with a home seller in Santa Clarita Valley. I have a few, which some are proving to be better than others.
When you are ready - I’ll be here for you - I’m Connor with Honor - Over and Out!
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