How has the practice of real estate changed recently?

I mentioned in a previous newsletter that there were changes coming in the real estate world, and they’ve arrived. As a result of a settlement by the National Association of Realtors®, there are a couple key things we are doing differently these days.

The first is that sellers are no longer committing to pay the buyer’s agent in advance, as part of the listing agreement, and there is no commission offer to a buyer’s agent in the MLS. In the newly revised forms, reflecting the new procedures, the listing agreement only specifies the commission a seller will pay to their own agent. Purchase offers from buyers can request that the seller pay the buyer’s agent commission, and that request is factored in by sellers when considering the offer, along with the price and all the other terms.

Another change is that agents now are required to have a signed representation agreement with any buyer clients, before showing them any properties. The representation agreement specifies a time frame for theagreement (up to 3 months max), and what commission will be paid to the agent when (or if) the buyer purchases a home. Buyers can pay this commission themselves, as part of their closing costs, or they can ask the seller to pay the commission as part of their offer.

When working with buyers, we as agents can no longer hop in the car and casually show properties that are on the market; we have to have a signed agreement first.

If you go to a weekend open house (or pop into a property that’s open during the week for broker’s tour), the agent there is showing you the property, but without a buyer representation agreement. This is allowed because the agent at the open house is representing the seller. The agent holding the house open will likely ask you to sign a new form that clarifies the representation in that case (the agent holding the house open is doing it as a representative of the seller).

I think it’s okay to sign this form if requested, whether you are a serious buyer, or only checking out a property in your neighborhood. By signing, you are just acknowledging that you have seen the disclosure, and that the agent holding the house open is not showing you the house as your agent. The pre-printed form has lines for your contact information, but the contact info is not required. If it were me, I would sign my name, and write down the name of my agent if I had one, and skip the contact info.