Issue link: https://imageup.uberflip.com/i/1521315
SOLERA DIAMOND VALLEY | JUNE 2024 19 By Suzette Strauss, SDV Resident Realtor Not even the homeless person on the corner works for free; they expect at least one meal. e mere use of the word "Work" insinuates compensation is expected. So, what is all this in the news about the Buyer's Agent not getting paid in a transaction? Perhaps you've read the statement, "No more 6%." Since this hit the news, I have been asked by so many residents what the meaning of this is. erefore, I will attempt to bring clarity to the situation based upon facts and information from the California Association of Realtors (C.A.R.) legal dept. First the Facts: Real Estate Commissions have always been negotiable. e 6% has been the customary percentage for decades due to the amount of work, costs, and liabilities associated with the job. is percentage has always been the result of negotiations between a Seller and the Seller's Agent. ey also determine the percentage split between the Seller's Agent and the Buyer's Agent. at said, there was a time in California when the split was typically equal and in many other states it still is. However, it is not uncommon for the split to be slightly different in favor of the Seller's Agent, also called the Listing Agent. ere are even some Listing Agents who list a property and feel they are entitled to receive 4% and give the Buyer's Agent only 2%. Again, the Seller has authority to negotiate the split. Information: As a result of the recent lawsuit that was "settled," C.A.R. legal dept. has said, beginning in July 2024 the National Association of Realtors (N.A.R) will require a Buyer's Agent to incorporate more documents into the transaction to establish their relationship with the Buyer prior to even showing property. Additionally, the percentage of commission set for the Buyer's Agent can no longer be advertised on any MLS or iBuyer platforms. Rather, the Buyer's Agent must call the Seller's Agent to obtain the percentage and add to the purchase agreement a request for the Seller to release such percentage at the close of escrow. Reality Check: In any real estate transaction, the funds to pay both Seller's Agent and Buyer's Agent come from the Buyer. If there is no Buyer, there is no offer. If there is no offer, there are no funds. In other words, the purchase supplies the Seller with funds to release through escrow to the Agents. Usually, the Buyer also must come up with additional funds to close escrow. All in all, it is business as usual in California. Every year we already have more forms required and this is just another addition. How did we go from a simple document and a handshake to nearly 200 pages potentially required? Frivolous lawsuits resulting from lack of clarity; most could have been settled through mediation. Read before you sign. You can never go wrong speaking the truth. Modern day real estate is as much disclose-disclose-disclose as it is location- location-location. Working for Free?!