As a homebuyer, understanding the proper protocols and etiquette in working with real estate agents is crucial. With the recent settlement between the National Association of Realtors (NAR) and the Department of Justice, there are new guidelines that both buyers and agents must follow. Here’s what you need to know to navigate these changes effectively and ensure a smooth home-buying experience.
The NAR Settlement: What Buyers Need to Know
The recent NAR settlement emphasizes transparency in the real estate process. One of the key points of the settlement is that real estate agents must now clearly disclose their commission structures to their clients. This change aims to promote honesty and ensure that buyers are fully aware of how their agents are compensated.
For buyers, this means you should expect clear communication about the fees and commissions involved in your transaction. Understanding these details can help you make more informed decisions and avoid any unexpected costs down the line.
New Requirement: Signed Agreement
Effective August 17, a new requirement mandates that all buyers must have a signed agreement with their real estate agent. This agreement formalizes the relationship between the buyer and the agent, outlining the responsibilities and expectations of both parties.
Why This Matters:
- Clarity and Commitment: A signed agreement ensures that both you and your agent are on the same page regarding services, expectations, and compensation.
- Legal Binding: The agreement is a legally binding document. This underscores the importance of choosing the right agent and committing to a single agent who will represent your best interests.
Loyalty to Your Real Estate Agent
Building a strong relationship with your real estate agent is essential for a successful home-buying journey. Your agent works hard to find properties that meet your criteria, negotiates on your behalf, and guides you through the complexities of the buying process. Here’s why loyalty matters:
- Commitment and Trust: A loyal relationship fosters trust and commitment. Your agent will be more invested in finding the perfect home for you if they know you are committed to working with them exclusively.
- Efficiency and Effectiveness: When you stick with one agent, they become more familiar with your preferences and needs, leading to more efficient and effective property searches.
- Professional Courtesy: Respecting the professional relationship with your agent is a standard of courtesy in the industry. This includes allowing your agent to arrange property viewings and be present during showings.
Proper Etiquette for Viewing Properties
One common issue in the real estate world is buyers contacting listing agents directly from for-sale signs to view properties. This practice can undermine your relationship with your agent and create confusion. Here’s the proper etiquette to follow:
- Coordinate with Your Agent: Always inform your agent about any property you’re interested in viewing. Your agent will make the necessary arrangements and schedule the viewing.
- Agent Attendance: Ensure your agent is present during the property viewing. This allows them to gather crucial information, provide professional insights, and represent your interests effectively.
- Respect the Procuring Cause: The agent who introduces you to the property is considered the procuring cause. It’s important to honor this relationship and avoid bypassing your agent.
The Risks of Signing Multiple Agreements
With the new requirement for a signed agreement, it’s essential to understand the implications of signing multiple agreements with different agents. If you sign an exclusive agreement with more than one agent, you could be legally bound to both agreements, which can lead to complications.
Legal and Financial Risks:
- Dual Commissions: If you sign agreements with two different agents and purchase a property with only one of them, the other agent could still be entitled to their commission. This means you might be liable to pay commissions to both agents.
- Legal Consequences: The brokerages involved could pursue legal action to recover their commissions, leading to potential court cases and additional costs for you.
When to Consider Changing Agents
Loyalty is important, but it’s equally crucial to receive the level of service you deserve. If you find that your agent is not meeting your expectations or you no longer wish to work with them, it’s appropriate to consider a change. Here are some signs that it might be time to switch agents:
- Lack of Communication: If your agent is consistently unresponsive or fails to keep you informed, it may be time to look for someone more attentive.
- Unmet Needs: If your agent is not showing you properties that match your criteria or fails to understand your needs, a new perspective might be beneficial.
- Professionalism and Trust Issues: Any breach of trust or professionalism should be addressed promptly. If unresolved, seeking a new agent is justified.
Important Step: Cancellation of Previous Agreement
Before switching to a new agent, ensure you obtain a cancellation of your previous exclusive buyer brokerage agreement. Without this cancellation, you could be liable for multiple commissions, as the previous agent may still have a claim to their commission if you purchase a property through another agent.
Final Thoughts
Navigating the home-buying process requires understanding both the formal protocols and the unspoken rules of etiquette. By adhering to these guidelines, you not only foster a positive relationship with your real estate agent but also ensure a smoother and more successful journey to homeownership. Remember, your agent is your ally—working together with mutual respect and clear communication will help you achieve your home-buying goals.
For more advice on home buying and to connect with dedicated real estate professionals, visit my website at www.labradarealty.com, email me at albert@labradarealty.com, or call me at 786-290-3594.