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As a result of the National Association of REALTORS® Settlement agreement related to broker commissions, as of August 17, one of the requirements is buyers nationwide are required to sign a written buyer agreement (also known as a broker buyer representation agreement) after they have selected a real estate professional they want to work with. To help consumers understand the new rules and practices, NAR has produced several consumers guides on each topic.
Here are what buyers should know about the written buyer agreement:
What is a “written buyer agreement?” What does it do? A written buyer agreement is an agreement between you and your real estate professional outlining the services your real estate professional will provide you, and what they will be paid for those services.
Why am I being asked to sign an agreement? Written buyer agreements became a nationwide requirement for many real estate professionals as a part of the NAR’s proposed settlement of litigation related to broker commissions.
Are these agreements new? In some places, yes. Many states have required them for years, while some have not. As a result, it is entirely possible you or others you know have not used them in the recent past. Regardless, they are now a nationwide requirement for real estate professionals.
Are these agreements negotiable? Yes! You should feel empowered to negotiate any aspect of the agreement with your real estate professional, such as the services you want to receive, the length of the agreement, and the compensation, if any. Compensation between you and your real estate professional is negotiable and not set by law. In the written agreement, the compensation must be clearly defined (e.g., $0, X flat fee, X percent, X hourly rate) and not open-ended or a range. Only sign an agreement that reflects what you have agreed to with your real estate professional.
How do I benefit from these agreements? These agreements clearly lay out what services you, as a homebuyer, expect your real estate professional to provide, and what your real estate professional will be paid. These agreements make things clear and reduce any potential confusion at the outset of your relationship with your real estate professional.
When do I need to sign an agreement? You will be asked to enter into a written buyer agreement with your real estate professional before “touring” a home with them, either in-person or virtually. If you are simply visiting an open house on your own or asking a real estate professional about their services, you do not need to sign a written buyer agreement.
Does this mean I have to pay my real estate professional out of pocket? Not necessarily. While you are responsible for paying your real estate professional as outlined by your agreement, you can still request, negotiate for, and receive compensation for your real estate professional from the seller or their agent.
Do agreements dictate a specific type of relationship I need to have with my real estate professional? No. You are allowed to enter into any type of business relationship with your real estate professional allowed by state law where you are purchasing a home.
Can I change or exit an agreement? Yes. You and your real estate professional can mutually agree to change your agreement. Agreements may have specific conditions under which they can be exited, so read the text of the agreement and speak with your real estate professional if you would like to change or exit your agreement. Realtors are members of the National Association of Realtors and are ethically obligated to act in your best interest.
For more information on this topic and other guides for consumers, visit https://www.nar.realtor/the-facts.
REALTORS® face real threats when working in the field, and it’s crucial to be prepared. September is REALTOR® Safety Month, and there’s no better time to reassess your safety protocols and make safety a top-of-mind priority.
The National Association of REALTORS® 2023 REALTOR® Safety Survey highlights alarming statistics of the potential dangers REALTORS® face while on the job:
- 56,000 REALTORS® were victims of a crime while performing their duties.
- 322,000 REALTORS® felt fear for their safety while on the job.
- 406,000 REALTORS® don’t have safety protocols in place to protect themselves.
Join NAR’s REALTOR® Safety Month webinar on Wednesday, September 18, 10 AM Pacific Time, and learn how to identify potential threats, leverage technology for safety, and effectively handle emergencies.
REGISTER HERE
Make the 10-Second Rule a habit whenever you are on the road.
The 10-Second Rule for Keeping Safe on the Road
Inattention is one of the main reasons people find themselves in dangerous situations.
Take a few precious seconds to assess your surroundings to help you spot and avoid danger. Make it a habit, and then share it with someone else.
Take two seconds when you arrive at your destination.
• Is there any questionable activity in the area?
• Are you parked in a well-lit, visible location?
• Can you be blocked in the driveway by another vehicle?
Take two seconds after you step out of your car.
• Are there suspicious people around?
• Do you know exactly where you’re going?
Take two seconds as you walk towards your destination.
• Are people coming and going or is the area unusually quiet?
• Do you observe any obstacles or hiding places in the parking lot or along the street?
• Is anyone loitering in the area?
Take two seconds at the door.
• Do you have an uneasy feeling as you’re walking in?
• Is someone following you in?
Take two seconds as soon as you enter your destination.
• Does anything seem out of place?
• Is anyone present who shouldn’t be there or who isn’t expected?
Give your safety the attention you deserve. All these take a total of 10 seconds! Protect yourself with more safety tips and resources from www.nar.realtor/safety
PRDS updated contracts and forms that comply with the new National Association of REALTORS® settlement guidelines for Buyer and Seller Representations are available today. REALTOR® members of the Silicon Valley Association of REALTORS® (SILVAR) and the San Mateo County Association of REALTORS® (SAMCAR) can access these forms on all electronic platforms – on the Transactions/zipForm Edition, TransactionDesk/Instanet platform at https://prdsforms.transactiondesk.com and on the SILVAR and SAMCAR websites, and on www.Glide.com (for SILVAR members only).
PRDS Forms is an extensive line of online forms for residential purchase and sales transactions. These forms are available online as a member benefit to all REALTOR® members of SILVAR and SAMCAR. The Standard Forms Committee, which is composed of brokers and top producers from SILVAR and SAMCAR, meets every other week and works very hard to make sure all forms are current and reflective of local practice.
The role of the REALTOR®, the benefits received from member involvement in REALTOR® association activities, and the importance of organized real estate to REALTORS® and their clients were laid out to members of the Silicon Valley Association of REALTORS® (SILVAR) by CEO Paul Cardus at the beginning of the year.
Cardus shared the following scenarios of what life would be for an agent or consumer if REALTOR® associations like the National Association of REALTORS® (NAR), California Association of REALTORS® (C.A.R.) or SILVAR did not exist in light of just one benefit, that of legislative advocacy:
- Agents would not be independent contractors; they would be employees working for banks.
- Services, including commissions, would be taxed.
- Conforming loan limits might be set at $400K, if they existed at all, instead of $1,149,825 in 2024.
- FHA loans likely would not be available.
- There would be no capital gains exclusion, mortgage interest deduction or 1031 exchanges.
- The commercial secondary mortgage market, which provides a stable flow of credit, would not exist.
- The liquidity, stability and affordability provided by Fannie Mae and Freddie Mac in the nation’s housing finance system would not exist.
- HUD would not employ local agents for sales.
- There would be no multiple listing service (MLS) or portals with standardized, reliable listing data.
- Universal buyer representation would not exist, leaving many buyers unprotected in the biggest transaction of their lives.
- Proposition 13 would not exist, making it hard for California’s seniors to afford to stay in their homes.
- Without impartial C.A.R. and PRDS standard forms provided by REALTORS® for REALTORS®, buyers and sellers would need attorneys to review and negotiate various one-sided forms for each transaction and be responsible and liable for researching state and local ordinances and codes, instead of using PRDS advisories.
- Flood insurance would become unobtainable.
- Property sales would require multiple point-of-sale approvals, like sewer lateral inspection and repair, from multiple agencies and inspectors. Sellers might have to invest tens of thousands in property upgrades just to sell. Escrows could extend for months or even longer.
- Rent control would be in place statewide, making it challenging to sell a tenant-occupied home or leave the business as a housing provider.
- Opportunity to Purchase (OPA) programs, like the one SILVAR helped defeat in East Palo Alto recently, would require property owners to offer homes to tenants or nonprofits before listing a rental property on the market and mandate the right of first refusal once an offer is accepted.
- Thousands of other legislative “bright ideas” would be blocked or kept in check because organizations like SILVAR, C.A.R. and NAR would not be around to engage volunteers, coordinate the resources, and hire professional staff to advocate on behalf of REALTORS® and their clients.
“The benefits that REALTORS® and their clients receive through REALTOR® membership in a REALTOR® association are quite the value,” said Cardus.
The role of the REALTOR®, the benefits received from member involvement in REALTOR® association activities, and the importance of organized real estate to REALTORS® and their clients were the main focus of the 2023 Economic Seminar & General Membership Meeting of the Silicon Valley Association of REALTORS® (SILVAR).
SILVAR CEO Paul Cardus laid out the following scenarios of what life would be for an agent or consumer if REALTOR® associations like the National Association of REALTORS® (NAR), California Association of REALTORS® (C.A.R.) or SILVAR did not exist in light of just one benefit, that of legislative advocacy:
- Agents would not be independent contractors; they would be employees working for banks.
- Services, including commissions, would be taxed.
- Conforming loan limits might be set at $400K, if they existed at all, instead of $1,149,825 in 2024.
- FHA loans likely would not be available.
- There would be no capital gains exclusion, mortgage interest deduction or 1031 exchanges.
- The commercial secondary mortgage market, which provides a stable flow of credit, would not exist.
- The liquidity, stability and affordability provided by Fannie Mae and Freddie Mac in the nation’s housing finance system would not exist.
- HUD would not employ local agents for sales.
- There would be no multiple listing service (MLS) or portals with standardized, reliable listing data.
- Universal buyer representation would not exist, leaving many buyers unprotected in the biggest transaction of their lives.
- Proposition 13 would not exist, making it hard for California’s seniors to afford to stay in their homes.
- Without impartial C.A.R. and PRDS standard forms provided by REALTORS® for REALTORS®, buyers and sellers would need attorneys to review and negotiate various one-sided forms for each transaction and be responsible and liable for researching state and local ordinances and codes, instead of using PRDS advisories.
- Flood insurance would become unobtainable.
- Property sales would require multiple point-of-sale approvals, like sewer lateral inspection and repair, from multiple agencies and inspectors. Sellers might have to invest tens of thousands in property upgrades just to sell. Escrows could extend for months or even longer.
- Rent control would be in place statewide, making it challenging to sell a tenant-occupied home or leave the business as a housing provider.
- Opportunity to Purchase (OPA) programs, like the one SILVAR helped defeat in East Palo Alto recently, would require property owners to offer homes to tenants or nonprofits before listing a rental property on the market and mandate the right of first refusal once an offer is accepted.
- Thousands of other legislative “bright ideas” would be blocked or kept in check because organizations like SILVAR, C.A.R. and NAR would not be around to engage volunteers, coordinate the resources, and hire professional staff to advocate on behalf of REALTORS® and their clients.
“The benefits that REALTORS® and their clients receive through REALTOR® membership in a REALTOR® association are quite the value,” said Cardus.
Elevated mortgage rates, high home prices and limited housing inventory are making the dream of homeownership difficult for Americans, National Association of REALTORS® Chief Economist Lawrence Yun told REALTORS® attending the “2023 NAR NXT The REALTOR® Experience” conference and expo in Anaheim last week.
Yun analyzed the current state of the U.S. residential real estate market and shared his 2024 outlook during the Residential Economic Issues and Trends Forum. He explained that high mortgage rates and low inventory have dominated 2023, and as a result, he predicts home sales will likely decline by 18% this year.
The housing shortage continues to be what’s edging up home prices, said Yun. “Lack of inventory is providing the support for high prices, but it’s also making it super difficult for first-time buyers to enter the housing market.”
First-time buyers face steep challenges. High rent, student and credit card debt, car loans, and childcare costs for those with children have made it difficult for many to save for a down payment.
High interest rates have had a great impact on the U.S. overall economic performance, said Yun. While the latest GDP figure of 4.9% shows growth, he warned there are some worrying signs in the economy. Business spending is essentially flat. Goods inventory is rising, which means products are being produced but they are not getting sold.
“We cannot keep adding to the shelves,” said Yun. “Just like in housing, businesses have to borrow money, and business spending is down because it’s more expensive to borrow.”
Yun said the jobs data is still positive, but each passing month shows diminishing strength. Based on the trendline, employment could become negative, which makes the upcoming GDP number looks to “worrisome.”
Yun noted that currently, the consumer price index (CPI) is much calmer, and with community banks suffering from high interest rates, the Fed should adjust its monetary tightening posture. In fact, the bond market appears to be reacting as if the Fed will be cutting interest rates next year.
“I believe we’ve already reached the peak in terms of interest rates,” Yun said. “The question is when are rates going to come down?”
Yun projects mortgage rates will head towards 7% in a few months and into the 6% range by the spring of 2024. He also anticipates that more sellers will enter the market.
“Builders are back on their feet, up 5% in newly constructed home sales year to date,” said Yun. “Builders can simply create inventory. In a housing shortage environment, builders are really benefiting.”
Other numerous trends point to possible pent-up seller activity that could trigger much-needed inventory due to life changes. This would include growing families, couples marrying or divorcing and seniors. There are seven million newborn babies, three million marriages, and 1.5 million divorces. Seven million people will turn 65 years old and will be looking to downsize or relocate to live closer to their children and grandchildren. Additionally, four million deaths, four million net new jobs, 50 million job switches, are all reasons sellers will need to sell sooner than later. Yun added that international buyers have declined, but once they return to the market, there will be a boost in buying.
“Pent-up sellers cannot wait any longer. People will begin to say, ‘life goes on,'” said Yun. “Listings will steadily show up, and new home sales will continue to do well. Existing home sales will rise by 15% next year.”
Nearly 12,000 NAR members and industry stakeholders from all 50 states, several U.S. territories and 40 countries attended last week’s NAR conference and expo. Representing the Silicon Valley Association of REALTORS® at the event were President Jim Hamilton and SILVAR NAR director Denise Welsh.
REALTORS® face job-related risks every day. Being aware of potential dangers and taking precautions will help you avoid risky situations. In an ongoing effort to keep safety top-of-mind for our members, the National Association of REALTORS® and the Silicon Valley Association of REALTORS® (SILVAR) dedicate September as REALTOR® Safety Month.
Learn to identify potential risks, anticipate threats, and respond proactively. Empower yourself with vital knowledge to navigate a dangerous situation, ensuring your personal safety on the job.
Follow Tips for Showing Properties the Safe Way
When you are showing a vacant property, you can take these simple steps to empower yourself against an attack or theft.
* Be sure to use the lockbox property-key procedure that has been established to improve real estate agent safety. A reliable, secure lockbox system ensures that keys don’t fall into the wrong hands.
* Show properties before dark. If you are going to be working after hours, advise your associate or supervisor of your schedule. If you must show a property after dark, turn on all lights as you go through the home, and don’t lower any shades or draw curtains or blinds.
* Call the office, a friend or family member every hour to let them know where you are.
* Prepare a scenario so you can leave or encourage someone who makes you uncomfortable to leave. Examples: Your cell phone or beeper went off and you have to call your office; you left some important information in your car; or another agent with buyers is on his way.
* When showing a property, always leave the front door unlocked for a quick exit while you and the client are inside. As you enter each room, stand near the door.
* Do not display purses or wear anything of value like expensive jewelry or watches
while at a property. Lock your purse in the car trunk before you arrive. Carry only non-valuable business items except for your cell phone.
* Park at the curb in front of the property, rather than in the driveway. It is much easier to escape in your vehicle if you don’t have to back out of a driveway. Parked in a driveway, another vehicle could purposefully or accidentally trap you.
See more safety tips, videos and webinars at www.REALTOR.org/Safety
Have you ever walked in the shoes of a homebuyer facing discrimination? Fairhaven, the National Association of REALTORS® fair housing simulation for REALTORS®, uses the power of storytelling to help members identify and address discriminatory practices in real estate.
Visit the fictional town of Fairhaven and work against the clock to sell homes while confronting realistic scenarios of discrimination in the homebuying process. Throughout the simulation receive actionable feedback that you can apply to your daily business interactions.
The training also includes powerful testimonials demonstrating the impact of housing discrimination in real people’s lives. Hold yourself accountable and make sure you’re adhering to fair housing laws by exploring the town of Fairhaven.
Get started now and complete the training HERE.
To learn more, visit nar.realtor/fairhaven.
The Silicon Valley Association of REALTORS® (SILVAR)has formed a new partnership with the Silicon Valley LGBTQ+ Real Estate Alliance. A Memorandum of Understanding between the local REALTOR® association and the LGBTQ+ Real Estate Alliance local chapter was approved by SILVAR’s Board of Directors at its meeting on Wednesday, June 22, 2022. The collaboration will allow both groups to identify opportunities that cultivate LGBTQ+ leaders and mobilize members in support of mutually beneficial federal policies, among other pro-LGBTQ+ and real estate industry initiatives.
“SILVAR has long championed homeownership for all, and this includes the LGBTQ+ community. We’re proud to announce our partnership with the Silicon Valley Alliance as we celebrate Pride Month in June and work toward initiatives that will benefit the real estate industry and our communities as a whole,” said SILVAR President Brett Caviness.
Homeownership in the U.S. is currently around 65%, while LGBTQ+ homeowner rates are lower, at about 49%. The LGBTQ+ community continues to face housing discrimination and does not feel they are welcome in certain communities where they would like to live. Nearly half of renters do not pursue homeownership due to fears of discrimination.
The National Association of REALTORS® amended its Code of Ethics in 2011 and 2014 to ensure REALTORS® uphold housing protections for members of the LGBTQ+ community. NAR has worked with the Department of Housing and Urban Development as it has reinforced its Fair Housing Act to prohibit discrimination based on sexual orientation and gender identity.
“SILVAR’s partnership with The Alliance is in line with NAR’s core values to lead change while advancing diversity and inclusion,” said SILVAR CEO Paul Cardus. “SILVAR and Silicon Valley LGBTQ+ Real Estate Alliance have a shared commitment in protecting private property rights and advancing the American Dream of homeownership for all.”
“The Silicon Valley LGBTQ+ Real Estate Alliance is grateful for the partnership and support SILVAR has offered us without hesitation,” said Jessa Walsh, Silicon Valley LGBTQ+ Alliance president. “Homeownership is the single most fundamental building block for creating long-term and generational wealth. It’s a challenging goal for anyone, especially in Silicon Valley. It’s our goal through the Alliance to ensure no one in our community experiences additional barriers in their pursuit of homeownership based on who they love or how they identify.”
Silicon Valley LGBTQ+ Real Estate Alliance vision is to create a world free of housing discrimination. “We believe it is imperative to educate ourselves, our agents, and our staffs on how to work with the LGBTQ+ community and ensure there is an inclusive space for everyone within our real estate industry,” said Walsh.
Silicon Valley Association of REALTORS® says ... 