The changes are here and it seems like the entire country is talking about it. If you’re nervous right now about what this means for your future, we are here to help. We are at the forefront of education, ensuring we (and our clients) are always prepared…
Consumers will be at a disadvantage if their agents aren’t well versed in how to navigate the new contract changes which in Colorado, wend live yesterday (8/15).
I love the way the President of REAL (Sharran Srivatsaa) a national brokerage summed up several questions on the minds of consumers right now.
#1: Are commissions fixed or set?
“Well, let me tell you this: nothing is fixed or set, and nothing has ever been and nothing is ever going to be because this is all based on a terms of exchange. All that needs to happen is that a seller of a home and a buyer of a home need to agree upon certain terms. Part of those terms include commissions and compensation. So, none of it is fixed.”
“The terms of a house can differ. You may be willing to sell your house for $1 a day for the next 4 million years. You may be asked for $10 million a day. You may want to pay commissions; you may not want to pay commissions. None of it is set. It is ensuring the smoothest possible way for buyers and sellers to get to the terms that they want in this entire transaction that’s number one.”
#2: I heard I don’t have to pay commissions anymore?
“It is actually true. You never had to pay commissions before, you never have to pay commissions in the future. But the most important part of this is the commissions are consideration paid for representation. If you would like professional representation, then there’s a fee that comes with it. For example, there are situations where home sellers may choose to list their home for sale by owner. They don’t pay a listing side representation for that. There are times when a buyer may choose to not be represented in this process. They don’t have to pay buy-side representation. But there are studies that have shown that utilizing and working with a licensed professional almost always in the highest of statistically significant scenarios, provides you a better result. Now, it is up to you whether you want to pay commissions or not, but most importantly, commissions are tied to consideration for representation…”
“So you don’t have to pay any commissions, but if you want representation, you have to figure out what part of that process and negotiate that with your representative just like you would with your CPA, your attorney, or any other professional service professional.”
#3: Do I have to sign a Buyer Representation Agreement?
“Yes. This is just like we sign a listing agreement to bring a home to market as a potential home buyer, you will sign a buyer representation agreement to engage professional services of a buyer agent to help you through that process. And that buyer agent can take you through all the terms of that representation agreement so that they can work in their fiduciary capacity with you.”
“So yes, you have to sign a buyer representation agreement to be actively involved working with an agent in the process of buying a home.”
#4: Does this only apply to certain markets or types of properties?
“The question is, does this apply to certain markets or certain types of properties? So this applies to residential real estate properties at this time, but this new rule set is actually impacting the entire United States. There are a couple of local markets that have some litigation legal nuance, but I’m going to foresee that even that goes away. And this is going to be a rule set that is accepted by all parties in all states and D.C. in the United States.”
“So yes, I would assume that this applies to all markets and residential properties.”
#5: Can I just work with my agent who I already know and love?
“Yes, absolutely. Nothing changes in how this agent represents you. There are just some practice changes overall in this process. And yes, you could call your agent, you should talk to them about it. And yes, if you love working with your agent, please continue to work with them because they are here in service of you.”
Ok back to Jason now…
I am so impressed with the way Compass at a national and local level here in Denver has handled the rollout of the contract changes and the education they have provided to us team leaders. The rollout is likely to be messy and the consumers who are working with the agents that know the contract the best will continue to win.
Have any specific questions? Give me a shout. I’d be glad to grab coffee to discuss in detail.
