August in Illinois can be sticky and hot, punctuated by crazy afternoon storms. But if you love thunderstorms as much as we do, your next house should have a nice, cozy porch. |
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| I am thrilled to announce that I am now licensed in Wisconsin. I am available to assist you with sales, purchases, and rentals. |
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The Booker Group celebrated national Ice Cream Day in the best way possible. The team passed out free ice cream for two hours on July 21. (For those keeping score, Häagen-Dazs chocolate was the most popular flavor.) |
What's this Contract My Broker Wants Me to Sign Before Showing Me a Property? |
Maybe you've read about the March court settlement with the National Association of Realtors (NAR). How does it change house-hunting with a real estate professional?
First, some history.
Historically in the United States, buyer brokers were compensated almost exclusively by the seller. Buyer broker commissions were split out from the seller broker's commission, and the amount of this compensation was published in the multiple listing service (MLS), a database of all the properties for sale within a specific region.
Under the settlement, which goes into effect August 17, two things happen:
- Buyer broker offers of compensation are no longer allowed on the MLS; and
- A buyer agency agreement is now mandatory, and must be signed by buyer and broker before seeing any properties together. (What you agree to compensate your broker still remains fully negotiable between between you and them.)
Here is how NAR explains what the settlement means for homebuyers:
- You will sign a written agreement with your agent before touring a home.
- Before signing this agreement, you should ensure it reflects the terms you have negotiated with your agent and that you understand exactly what services and value will be provided, and for how much.
- The buyer agreement must include four components concerning compensation:
1. A specific and conspicuous disclosure of the amount or rate of compensation the real estate agent will receive or how this amount will be determined.
2. Compensation that is objective (e.g., $0, X flat fee, X percent, X hourly rate)—and not open-ended (e.g., cannot be “buyer broker compensation shall be whatever the amount the seller is offering to the buyer”).
3. A term that prohibits the agent from receiving compensation for brokerage services from any source that exceeds the amount or rate agreed to in the agreement with the buyer; and,
4. A conspicuous statement that broker fees and commissions are fully negotiable and not set by law.
(Source: https://www.nar.realtor/the-facts/nar-settlement-faqs)
Importantly, sellers may still offer to compensate your broker. And you can still accept concessions from the seller, such as credits or offers to pay closing costs.
In fact, so-called Buyers Agency Agreements have existed for several decades as an optional contract between buyers and their broker. What the recent settlement does is to make them mandatory before seeing any properties together.
Our brokerage, Engel & Völkers Chicago North Shore, has been anticipating this change for months, and has carefully crafted new, complaint contracts. Moreover, every E&V Advisor has received extensive training on how these contracts work and should be explained to prospective clients.
The important takeaway: This is a national shift that will be required of all brokers and all clients going forward.
Still have questions? The Booker Group is happy to answer them. As before, we're here to help you successfully navigate the homebuying process. |
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For Rent 1702 Dempster Street Evanston, IL 60202 |
| Sold 3632 N Western Ave Chicago, IL 60618 |
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Interested in house flipping? Looking for promising properties in Illinois or Wisconsin? The Booker Group is happy to help you. |
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Did you miss last months newsletter? |
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Engel & Völkers - Chicago North Shore
566 Chestnut Street 2nd Floor I Winnetka I IL 60093 224-420-0040 - Ellis 847.418.7318 - Erin erin.booker@evrealestate.com I erinbooker.evrealestate.com |
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