New Realtor Rules and Paperwork Are Coming

One of the biggest complaints at real estate closings is all the paperwork that’s required to be signed. That is, by the way, one reason to have a closing attorney at your side—to help you navigate and understand what you are signing.

But recent changes in laws, and specifically, a court settlement, will now make that process a bit more complex. Here are some of the changes that buyers and sellers can expect, largely as a result of a lawsuit involving the National Association of Realtors.

What Was the Lawsuit All About?

The lawsuit originally came about over allegations that realtors were fixing prices, or colluding, to set standard real estate fees or commissions. As a result, it was alleged consumers had no power to negotiate and there was no competition in the realtor market.

The case eventually settled, altering how realtors get paid.

Commission Disclosures in Listings

Of course, most buyers and sellers don’t care about the legalities of the lawsuit or the settlement—just about how it will affect them in the process of buying or selling property.

The first change will be before you even contract for the property: real estate listings themselves will no longer state what the real estate agents earn as compensation. This is to avoid agents who, some say, lead buyers to properties where there were better commissions involved.

A New Agreement

When you do get a listing agent, the buyer and the seller will now have to sign an agreement with the realtor before being shown any type of property or before being helped with a purchase or sale. This was rarely done on the buyer’s end (sellers did it a bit more commonly in the past).

The agreement will have a time term in which the buyer will utilize that realtor and the agreement will have a fee schedule—which may not just be the standard commission based; it could be flat fee or other payment arrangements.

The agreement will also specifically state that whatever the pay to the realtor, the pay arrangement is negotiable (at least, legally—whether the realtor agrees to negotiate is up to him or her).

Who Pays?

Traditionally, the seller would pay for the real estate agents on both sides. That will no longer be the case. Because that is no longer traditional or required, sellers in high demand markets may put that burden on buyers, thus increasing the total purchase price for buyers.

Of course, buyers who are willing to pay for the seller’s realtor fees can include that in their offers as well in order to give them an advantage over other offerors, in competitive markets.

Others may just opt to not use a realtor to decrease the costs associated with purchasing property.

Too Much Paperwork?

While this seems simple enough, like many documents in real estate transactions, the contracts can be quite complex. According to one report, early model contracts are already seven pages long. Some who have seen it are concerned that no consumer will ever read the contents of the agreement.

Call the West Palm Beach real estate lawyers at The Law Offices of Larry E. Bray today for help buying or selling property and with the paperwork associated with your real estate closing.

Sources:

time.com/7006951/nar-settlement-whats-changing/

local10.com/news/local/2024/08/16/buying-a-house-get-ready-to-sign-even-more-paperwork/