If you have had time to pay attention to the news, you know that recently there has been a bit of a sea change in the way real estate transactions are handled. This has been precipitated by a settlement with the National Association of Realtors to resolve antitrust lawsuits. The bottom line is to de-couple the payment of listing broker’s and buyer broker’s commissions so that each party – a seller or a buyer – will negotiate their commission separately with their agent. There are two things as a result of the settlement that you should know about, one with respect to commissions and the other with respect to a disclosure form buyers may be asked to sign at open houses.
Commissions
With respect to commissions, before a realtor representing a buyer can show a property, we are now required to have a signed buyer/broker agreement where the commission has been separately negotiated. The buyer is ultimately responsible for that payment at sale (it had historically been paid by the seller at the close but essentially paid by the buyer through the sales price). It is still possible that some sellers may agree to compensate a buyer’s broker, relieving a buyer from paying the commission directly, but this must be included as part of a buyer’s offer and must be accepted by the seller.
SF Open Houses
Another part of this settlement involves Open Houses and is not a big deal. People who come into an Open House may be asked to sign a form with a disclosure that the agent at the Open House represents the seller only. The form is merely an advisory sheet and it is not mandatory to sign. The California Association of Realtors recommends that if a visitor doesn’t sign the form, the listing agent should limit their discussion only to what information is on the flyer. This is just a recommendation so some agents may follow it and others may not.
While it may appear obvious that the listing agent only represents the seller, some agents look for potential buyers or sellers to engage with to turn them into clients. If visitors who come into the open house start speaking to the listing agent about representing them in some capacity, the listing agent will provide a separate buyer/broker agreement for these visitors to sign. Be prepared to answer the question as to whether or not you have an exclusive buyer/broker agreement with another agent.
If you have any other questions about this process or need help buying a property in SF, don’t hesitate to contact me!
