Happy August, everyone!
We want to share a significant update in the real estate industry:
On July 24th, the California Association of Realtors made substantive changes to the existing forms used to purchase and sell residential real estate in California due to a settlement with the National Association of Realtors. These changes will impact buyers and sellers and go into effect for the Peninsula's regional Multiple Listing Service (MLS) on August 12, 2024.
Historically, the home seller paid the professional fee at the closing of a sale, which was typically split between the seller’s and buyer’s brokerages.
Under the new rules, home buyers must establish a buyer-broker agreement with their buyer's brokerage to determine the professional fee before the purchase, establish the buyer's agent's duties as a fiduciary, and formalize the relationship between the buyer and the buyer's agent.
This buyer-broker agreement presents multiple payment options for compensating the buyer’s broker.
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The home seller can still use the sale proceeds to compensate the buyer’s broker or offer concessions to the buyer.
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The home buyer can pay the compensation directly to their agent’s brokerage (buyer's agent).
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A combination of the methods mentioned above.
Moreover, the MLS will no longer disclose the professional fee offered by the home seller to the buyer’s agent’s brokerage. Instead, it may indicate whether the seller is willing to provide a concession to the buyer.
We welcome these adjustments as they underscore the importance of selecting a trusted real estate advisor and formalizing the relationship with a clear and transparent understanding of roles.
We're committed to making sure you experience an exceptional home buying and selling process and are here to answer any questions you may have about these upcoming changes.
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