Home Buyers Need to Know This!

WHAT BUYERS NEED TO KNOW: The Importance of Having the Right Agent on Your side

As mandated by the recent National Association of Realtors Settlement Agreement, new Exclusive Buyer Brokerage Agreements have been introduced. Starting August 17th, 2024, all real estate brokers nationwide, including those in Phoenix, Arizona, must ensure buyers sign an Exclusive Buyer Brokerage Agreement before touring any homes. These updated agreements replace the previous versions last revised in 2016, incorporating necessary disclosures from the NAR Settlement along with several additional changes.

Although this is not a law, it is a nationwide mandate.

Keep in Mind:

With 16 years of experience in the real estate industry, Heather McDermott, an Accredited Buyer’s Representative® (ABR), has always encouraged signing Buyer Broker Agreements to protect both the buyer and the agent. This practice is not new, but it reinforces the importance of formalizing the relationship between buyers and their agents. Heather has always advocated for her buyers by ensuring that either the seller or the listing brokerage covers her fees. All fees and commissions remain negotiable, and Heather is prepared to negotiate heavily to avoid unnecessary costs for her buyers. She is a nationally certified expert advisor, trained to support both buyers and sellers.

Schedule a no-obligation buyer consultation with Heather and her team today: www.connectwithheathermcdermott.com

How We Have Protected Our Buyers and Will Continue to Do So:

New Construction:

We have helped buyers negotiate significant discounts, sometimes up to $30,000 off the list price, and up to $20,000 in additional incentives, including having the builder pay her Buyer Agent Fees.

Residential Resale Homes/Condos:

We have successfully negotiated on behalf of buyers for closing cost credits, rate buy-downs, seller concessions, furniture, repairs, and more, ensuring that her Buyer Agent Fees were covered by either the seller or the listing brokerage.

Both New Construction and Residential Resale:

We have protected buyers from purchasing homes that did not meet their standards or budget for repairs. She has guided them through the release and cancellation process, ensuring they retained their Earnest Money Deposit and moved on to a more suitable investment.

With these changes, the question is:

Who Would You Want Protecting You as a Buyer?

• An experienced agent who has served thousands of buyers
• An experienced agent with proven negotiation skills
• An experienced agent who can protect you and your money
• An experienced agent who takes the time to understand your wants, needs, desires, and budget
• An expert advisor in the market and area you want to live in
• An expert team with resources to help you as a buyer

What is an Exclusive Buyer Brokerage Agreement?

An Exclusive Buyer Brokerage Agreement is a formal contract between a real estate broker and a potential homebuyer. Our team works with various types of these agreements, each tailored to different broker representations: single agent, transaction broker, single agent with consent to transition to transaction broker, and no brokerage relationship. Through this agreement, buyers commit to working exclusively with our team in their property search, in exchange for a commission paid to the broker. In return, our team pledges to represent our buyers' interests, offering professional advice, market insights, and skilled negotiation to secure the best possible contract.

Revisions in the Agreements:

Negotiable Broker Commissions:

The agreements now clearly state that broker commissions are not set by law and are fully negotiable. Brokers may not receive compensation from any source exceeding the agreed amount or rate with the buyer.

Clarified Compensation Provisions:

Compensation received by the buyer’s broker from a seller or seller’s broker will now reduce any amount owed by the buyer.

Retainer Provisions:

The revised agreements specify that any retainer paid to the buyer’s broker upon execution of the agreement is in addition to the broker's earned compensation. The option to credit the retainer towards any amount owed has been removed.

Property Section Updates:

The revised agreements no longer specify the price range of the property sought by the buyer or whether the buyer is preapproved with a lender.

Buyer’s Obligations:

Buyers now commit to diligently making a good faith effort to perform contract terms and to close on the sale of any contracted property.

Protection Period:

A default protection period of 30 days has been added, with a blank space to adjust this duration if necessary.

Arbitration Option:

An option for arbitration of disputes has been included. If not agreed upon, disputes may be litigated in court. Previous agreements required arbitration.

What’s Next?

July will also see the release of several updated forms, including an Amended Showing Agreement, Amended Retainer Agreement, Amended Listing Agreements, a Modification to Buyer Broker Agreement, and additional forms for compliance with settlement requirements for existing agreements.

Final Thoughts

The revisions to the Exclusive Buyer Brokerage Agreements ensure compliance with the NAR Settlement Agreement. While the changes focus on refinement rather than complete transformation, they represent an opportunity to further streamline services. Out team is committed to learning and mastering these new forms before the August 17th deadline to continue providing exceptional service to her clients.

By adopting these updated agreements, we aim to enhance our dedication to our clients, ensuring transparency and professionalism in every transaction. Connect with Heather McDermott and her team today: www.connectwithheathermcdermott.com