Buyers Beware - Buying a Home Soon?
 

Home Buyers Beware!
Buying a home?
Your favorite Realtor is now 'handcuffed' by the ongoing NAR Lawsuit Settlement.
You will have to sign, first a "Pre-Showing Agreement", then the 'Showing Agreement" before you can look at any listings.
And also there is a "Compensation Agreement" which dictates how and how much they will be paid. (By You?)
The 'Showing Agreement' allows them to review your credit report, demands that you disclose the fact that you have or will be working with another Realtor and, what scares me most is this "indemnifying and holding the Broker harmless from losses, damages, costs, and expenses of any nature" because of (what they deem to be) your 'negligence, misrepresentation, or default on these agreements'.
Paying a Buyer Broker, though not typical, is nothing new.
These new forms are way too wide-ranging and complicated to spell out here.
If you use a Buyers Broker, you're on the hook for a fee.
They can't collect their fee, which exceeds WHAT YOU PROMISE THEM from anyone else, so it's likely to be a lot of money..
My advice, never sign anything without a prior review by your lawyer.
Also be aware that, while the Listing Realtor acts exclusively for the Owner/Seller, they are not required to use any of these forms, nor should they charge you a fee/commission.
Stay Safe !

LOL. I don't need a lawyer to review the contract. There is no way I would ever sign it. The real estate agent may be handcuffed, but I'm not.

have been reading about buyers agent agreements being litigated for many reasons on my socials

What I am waiting to see is how "Open Houses" are going to make it in the future. Uncertain at this time.

Many are currently defiant today, but as a buyer, will be interesting to see how the new requirements shake out. It's not all about the commissions, but about many other constraints which people won't like or will need to get used to.

good luck to the new buyers...

Open houses are very popular in The Villages. What would prevent a buyer from attending an open house and making a cash offer? That is what I would do, and it would not include a buyer's commission to an agent.

you may not be allowed to do so under the new rules. . . just because you think you can at the moment, you may not be able to in the future without a signed buyers agreement.

its all still in the pre execution / pre reality stage. . which is why I typed, will be interesting to see how this shakes out. .

Thanks. I predict that this arrangement will never fly because it sifles competition. It's still a free country, and no one can stop a person from making an offer to buy a house from the owner. It's just not logical. I will never pay an agent a commission to buy a house.

No one is required to have a buyer's agent. An individual can absolutely walk into a house and make on offer on their own accord.

The whole thing is about buyer's agent compensation. No buyer's agent, no compensation worries.

Thank you. I have never hired a buyer's agent and I never will.

Many go to open houses with no intention or interest in immediately buying that particular house. I have not seen these so called new rules for real estate but once again on the surface it smells of another overreach by government.

Maybe, but it sounds to me like real estate agents want to have their cake and eat it. They want to pretend to represent a buyer but be paid by the seller. If a buyer needs an agent to hold their hand, then they should pay them for it.

Also, the law states that you can attend open houses and ask questions without signing anything. You don’t need an agent to buy if you prefer to DIY.
This law will reduce double dipping by selling agent and reduce seller fees by offering half of the usual 5 - 6 % commission as the buyers are on their own.

A lot of misinformation in this post.

That isn't unusual now. But as a buyer you are entering a transaction unrepresented and since Florida doesn't allow dual agency the seller agent really has no obligations to help you out with info or anything.

How is the current system "double dipping"? The seller knows that their agent is paying a co-broke commission to the buyer agent.

The changes aren't going to do a darned thing. The seller agents will still recommend the seller pay the buyer agent. Buyer agents are still going to want to get paid and if you are a seller you will want your house to be shown.

I could see circumstance where seller refuses to pay buyer agent, and the buyer agrees to pay their agent. But in the end, what the buyer has to spend will have to include what their agent is paid. This is all smoke and mirrors, just shifting how it's communicated.

Does this apply to the non-MLS sales agents of The Villages????

If the seller refuses to pay the buyer's agent, then the buyer has to cough up the 2-3% or whatever the agreement is. If the buyer can't roll that into the mortgage, a buyer will have to save for a 20% down payment and a 3% agent fee. On the Average $450,000, that's an extra $13,000 + out of pocket. That just might change what a buyer can buy, and may reduce the potential buyers who aren't real estate savvy enough to buy it themselves.

Yes, this agreement is about eliminating dual agent roles, as well as compensation for each role. The problem is not the rules, it's always about the implementation with legal agreements and state laws.

I read one real estate agent, who was also a lawyer, mention a suit in progress:
One person bid on a house with a buyer's agent. Didn't get the house, but the buyers agent had them sign a 6 month exclusive agreement in the offer letter. Then the buyer's agent wouldn't release the buyer after the failed bid. . off to court! (and don't ask me for details or suggest that everyone would catch that! I have personal examples of lawyers not signing documents during meetings to sign documents)

Again, all in the implementation and execution of agreements. And dealing with hoomans.

I agree. This whole issue was caused by real estate agents who pretend to represent a buyer when they really don't. How many times have you heard a buyer refer to the agent who is showing houses to them as "my agent", when the agent legally represents the seller? This was a fraud. If a buyer wants legal representation, they should hire their own agent and pay them a fee. Hopefully, this new arrangement will stop agents from defrauding buyers.

Here in MA, there are only listing / selling agents.
why?
because the lawyers manage the buyer's agreement. You want to put an offer on a house?
create the offer letter, run it by your RE lawyer, and you are good to go. the buyer's lawyer will guide the buyer for unseen circumstances. For me, my mom's house is owned by my deceased dad and my dementia incapacitated mom's individual trusts. I am the sole trustee of each trust. The Buyer's lawyer will want proof of estate taxes paid or not owed, that my mom is legally incapacitated for both trusts, etc, so that the title can be passed cleanly. . .

IN FL, I am ignorant, but there was a sh!t load more papers to sign stating adult common knowledge is known.

No. They are not governed by NAR rules.

What ??
 

Agents defrauding buyers ?? Really what world do you live in.. what rubbish..

So, you don't think that real estate agents try to convince buyers that they a working for them, when, legally, they are representing the seller? That is deceptive. Maybe fraud is too strong a word. But, you must admit that buyers often refer to the agent who sells them a house as "my agent", when they don't have a written contract with the agent.

Double dipping refers to a situation where the seller’s agent also finds a buyer and therefore does not split the 5-6% commission. In other words, they get both halves of the commission as there is no buyers agent to pay from the commission paid by the seller at closing.

Where do you come up with the contention there are only "Listing Agents" in MA?

MA has operated like most every other state for many years and allows "dual agency", provided it's disclosed and MA certainly has Buyer's Agents.

Just a guess, but having bought and sold 100's of homes in MA and owned a real estate agency in MA, I would be very surprised if more than 20%-25% of Buyers, hire an attorney.

Most everyone *thinks* the "closing attorney" is their lawyer, but the closing attorney is only acting as a Title Attorney and is representing the bank (mortgage holder).

How this new FTC Ruling shakes out, is still up for debate. I don't see it helping consumers as much as the FTC would have you believe it will. On its face, I think it will work against consumers, at least in the beginning.

If I were to take a wild guess, I think it's going to eventually put "Selling Brokers" out of business. The market has been moving towards that, since the advent of the Internet, Zillow, RedFin and now even the MLS allows people to list on their service.

Remember the old saying - “Hello I am from the government and I am here to help you!” - REALLY

It's really not that complicated. The buyer was always paying for both seller/buyer commissions. The seller always calculated that into the price to calculate their net. It's actually more transparent for the buyer and they have an agent that is a fiduciary in the transaction.

True, but you are free to walk away. It's the best "tool" a buyer has.

Collecting the entire fee is not double dipping. People always sign an agreement that agents, usually, act as sellers and buyers agents. Although it is relatively rare for the listing agent to also sell the house, it does happen. They have to put in time and effort on both ends. Would you work for nothing?

Villages realtors are in the dark ages
 

Villages realtors have told me that The villages is not changing their compensation. Presently it cost sellers 5% to list a home with The villages, 3% goes to the selling agent and 2% to the buyers agent. They are not going to change that and they are NOT part of the class action lawsuit. If I was going to sell a home after August 17, I would not list with a Villages Realtor.
Right now, The villages gets slightly more listings than the MLS from people who are selling their home. I think this will change. When sellers figure out they only have to pay their broker 3%, I doubt they’d be willing to list with The villages and pay 5%. I think many more sellers will move Toward the MLS and list their properties through them.

What I find interesting is EVERY SINGLE ONE of these gloom and doom reports to scare people NEVER turn out to be true! They're someone else's particular take on a subject. Folks....my recommendation....don't pay attention to these negative posts that could complicate your life. If you're actually buying or ready to buy at home, I'm sure you'll find out. Don't worry about someone's negative posts on TOTV. Have a great day!

Agreed. Plus I also say "ignore the realtors". Seriously, sellers ... offer for sale by owner. There are websites that easily facilitate this. And, even if you are not tech savvy, there are services that will help you by taking photos and posting your information. Yes, you will pay them but NOT a percentage of the sale price. Both you and the buyer will save money. Standard contracts are available regarding inspections, etc. All you really need is the title company to do the paperwork & closing. Optional warranties can still be offered by the seller. Realtors are way over paid. And, there is no reason that their compensation should ever have been a percentage of the sale price. The work to sell a $300,000 property and a $700,000 property is the same.

Think of it as a dating service. You don't need a third party in order to meet each other. And you certainly don't need to pay a third party when you finally decide to have sex (consummate the deal).

Yes you did
 

The way I see it, if you bought real estate and the seller had an agent. You paid for the house andthe realtor did get paid and they were paid with your money.

This is common real estate terminology. Every realtor knows what it means. I agree that the selling realtor must put in time when marketing the same home to a buyer but, as a seller, I would never allow it. The reason is because there is a huge conflict of interest. How can the selling realtor ONLY serve my best interests when negotiating the terms? I have had realtors say they can but when large dollars are at stake, I have my doubts. Under the new law, a realtor would need to sign contracts to represent both the buyer and the seller. Is the realtor going to ask for the seller to cover the buyer’s fee or stand firm and represent only the seller?

Great reply ! The poster is trying to be helpful I'm sure, but you also bring out that people ARE also responsible for their own protection.

Really interested in this topic (I'm not and never have been associated in any way with real estate sales) but not sure what you meant by "how open houses will make it in the future" ? Can you explain a bit more ? Are you thinking the new "rules" or whatever they are (?) will promote more, or fewer, open houses ? To me the whole system is a giant, confusing, mess. Seems it could be simplified IF there was any advocacy for simplification ! IMO, the Villages adds an even more unnecessary element to all of it. This is the only place/state where we've lived, including other locations in Florida, where the mind boggling ritual of having to have a mls agent actually present if we have an agent from the Villages, and vice versa. Way too complicated and unnecessary .... but it seems to have a lot of support, so, just one opinion here !

Coming from, & buying houses there, a state that has had buyer's agents for a long, long time, I am not fussed. I also think, having seen both varieties, that buyer's agents are good for buyers.

To me that seems infinitely logical. If a person wants someone to FIND prospective homes/real estate FOR THEM, why even have it connected to the entire process at all ? Why not just contact and interview people in that profession (a person whose business in finding what an individual is looking for). When you find someone that suits your personal tastes, you pay the person a fee just like you pay a person who comes to fix a plumbing issue. The people who sell their services to find homes/real estate, could write their own terms; PAY ME $ --------, and if I am not able to find what you are seeking in 6 months (or 4 months, or 3 months, whatever the two of you agree on) then your payment is refunded based on a percentage withheld for the time and effort the "finder" put into the effort. If the finder found the buyer's desired property, they would of course get the the entire amount agreed on. Keep this completely separate from the event of someone contracting with an "agent" from any agency they engage to "list" (advertise, show) their property. People who don't have the time, but have the money, pay people all the time to do "shopping" and other tasks for them. Why not just "employ" a "personal home shopper" IF that's what you want, and for others who prefer to read the ads, drive through areas they desire to live and look for signs rather from a realty or OSBO, go to open houses and model home exhibitions, and so on. If you don't have the time, or the desire to go shop yourself, then go hire someone and you and that person decide on the terms !

Actually none of this is new. It is just another effort to make people aware. Real estate and real estate law is strange. First of all it is serious money. Not like you buy a wrong wrench or similar item and you say it is $20 I will use it some day.

Some strange stuff, if it isn't in writing, it is meaningless.

The broker usually works for the seller. You often forget that. IF, as is typical you ride in their car and are talking to your spouse. You say we'll offer $$$$$ but we could pay more-it is worth it. The broker has to bring any offer to the seller IF IT IS PUT IN WRITING. They go to the seller, who they work for, and say don't accept this offer they will go higher.

The code of ethics. Years ago not in Florida. I put in a written offer on a house. Later it sold for less than my offer. I contacted the real estate board. They wanted me to appear and testify. REALITY. i ASKED, any penalties go to the real estate board not to me.

Like everything ETHICS. It is serious money. Thou shalt not steal. For many they read don't steal from me but it is fine if I steal from you.

Everything Is a matter of OPINION. An opened house. In the Villages it seems the sales person is trying to sell to buyers. In the villages it seems to be something for bored people to do. From what I've read and what we experienced when we sold our previous home. While the listing broker will show the home to potential buyers it was mostly to show it to other brokers Perhaps part of the reason, they were all custom built not limited to this model or that model. Our home was built in 1948. You can't even buy the wood used.

A lot of info
 

I’m not being disrespectful, what is your source?

I don't think it will change the quantity of open houses. I am wondering how open houses will be managed with respect to accepting offers on the spot, with respect to having a buyers agent agreement in place as a requirement, etc. .

I do not know how the rules will change or influence the process of an open house, if at all. That's why i am not sure how open houses will happen. . . If you see a house with an open house on the internet, there may not be an address. To find out and be allowed to go, some sites are assigning you a buyer's agent. not sure how that will play out, and if that continues, I don't know how open houses will continue through internet advertisements. .

if not, then through your buyer's broker, as the selling broker won't care? Again the technology disruptors always think that they know best. . just because they can envision a different solution. doesn't mean that they don't create chaos and mistrust in their solution. .

Friends in MA just signed a selling agent / broker agreement to sell their house before moving to TV. They offered 2% to the buyers agent, not sure about the total commission structure though. . The RE agent did say that they never do both, ie the transactional agent. Some do, but they don't. . .