The NAR Settlement & Buyer's Agency
The National Associations of REALTORS (NAR) recently settled a class-action lawsuit that will have an impact on how real property is bought and sold. Ultimately, we see this as a good thing. The buyer side of the equation will increase in transparency and professionalism. Black Canyon Homes does a lot of buyer business so we wanted to share just a few points to help clarify things. More importantly, we will take all of the time necessary to talk through the changes and how you are impacted. Ask us anything. Key points: 1. All agency compensation (listing and buy-side) has always been negotiable and remains that way. 2. As of August 17, 2024, agents assisting buyers CANNOT show a listed home without an agreement in place beforehand. This is a requirement for any agent who belongs to an MLS (who isn't?). So, when your newly found agent tells you that you have to sign an agreement just to show you a property that you saw on Zillor or Realtor or wherever, they are telling you the truth. 3. Part of the agency agreement deals with buyer agency compensation. As of August 17, 2024, listing agents can no longer publish the buyer agent compensation in the MLS system. Buyer agent compensation has to be negotiated between the buyer and the buyer agent separately. Yes, the comp can still come from the seller side like before. 4. We expect that listing agents will still encourage their sellers to provide compensation to buyer's agents. This remains legal and can be published anywhere outside of the MLS system (flyers, agent websites, etc.). We think that it will be a competitive advantage in our listings to actually promote buyer compensation because homes without will be negatively impacted. Imagine offering even just a small % more than anyone else and what kind of exposure to potential buyers that brings. 5. There are several options for how a buyer's agent can be paid. Examples.... The buyer can pay their agent. The seller or listing brokerage can still pay the buyer agent (like it was commonly done in the past). Or there can even be a hybrid. What we think you will commonly see is that a buyer's agent will negotiate with their buyer to pay a certain amount, let's say 3% for representing them. The buyer will then be responsible for paying that amount. However, in the buyer agreement, there is a check box that says that the seller or listing broker may pay. So, while the agreement says the buyer is responsible, the net is that the seller pays some (whatever he/she agreed to when they listed the house, say 2.5%), and the buyer pays the rest (3% - 2.5% = .5%). 6. It would not surprise us to see the lending industry allow for buyer compensation to be rolled into the loan "one day". The net net of pre-August 17 deals involving financing commonly had that result anyway. Buyer finances 80% of the price, and seller pays all agency compensation out of his proceeds. 7. There might be confusion on how all this plays out as we transition over. Eventually, the market will be savvy to the new rules, and things will stablize. Ultimately, we do not believe that this will be as big a deal as some are making it. We certainly do not agree that this will reduce home buying costs. No one works for free. Are "they" thinking that buyer representation will just go away? Would you walk into a divorce proceding without professional representation when the other party has a trained pro? Who is going to come out on the short end of that stick? REALTORS are pros. They deal with stuff every single day, and representation insures as smooth a purchase with the most favorable terms possible. Change can be good. We believe it will be, and we are big advocates in open communications and an educated consumer. Please feel free to reach out with any questions. The team of Black Canyon Homes
Stopping Real Estate Fraud
No one wants to be the victim of fraud. In real estate, there are many ways people can get scammed. It's very uncool. Here are a few resources if you feel the need for it: Colorado Foreclosure Hotline: The best resource available to consumers facing foreclosure is the Colorado Foreclosure Hotline, which can be reached at 1-877-601-HOPE (4673). Homeowners who contact the Colorado Foreclosure Hotline to receive assistance stand a much better chance of saving their home than those who go it alone. Colorado Housing Connects: Colorado is a leader among states when it comes to foreclosure prevention. Colorado Housing Connects will get people the help they need. 844-926-6632 HUD Resources: Coloradans behind on their housing payments or who are worried about falling behind can speak with a HUD-approved housing counselor to help them understand their options when they’re facing foreclosure. 800-569-4287 VA Assistance for Veterans: The VA aids veterans facing foreclosure or homelessness regardless of whether they have a VA loan or not. 877-827-3702 Homeless veterans can call the National Call Center for Homeless Veterans at 877-4AID-VET. Stop Fraud: Unfortunately, mortgage fraud gives rise to foreclosures. Colorado owners facing foreclosure due to mortgage fraud can find help on the Stop Fraud Colorado website. We hope you don't need any of these.
Real Estate State of the Nation
If you want to move to Montrose like many do these days, there are some key things to consider. Inventory remains tight, espcially under the $399k range. It feels like a seller's market to us. This can make it super hard for folks buying for the first time. There is NO rental supply at the moment. Tight. Tight. Annnnd, at the same time, we see conflicting info in the news. There was an interersting article last week on Fox News. Noteable observations and our comments: 1. Redfin mentioned that the average monthly house payment in the US is $2,775 up 11% from this time last year. We feel ya. 2. The FED seems to be wonky in its monteary policy. Are rate cuts coming or not? 3. Freddie Mac said Thursday that we crossed over the 7% mortgage rate range for the first time this year. Gold crossed its own all-time-high just recently. Wait...don't gold prices go opposite rates? Nevermind. 4. Most homeowners are twice as likely to sell their home if their current rates are more than 5% as compared to the rest. That 2.875% loan you got in the COVID era sure does seem nice, nice. People like hanging onto those numbers. 5. This forces overall inventory to be thin, thin, which is why pricing is still increasing and nice homes, priced right go quickly. Feels like a contradiction at times. Wow! Is that confusing or what? Our thoughts are that if you have to buy or sell a new place, have your game face on. Get prequalified, if getting a loan. Be ready to act. Know your market (we can help). Price your place right (we can help here too). Overall, homes are selling. All said... Give us a shout, if you are looking to buy or sell your place. We are happy to just sit and converse over your situation and offer any insight to help you out. No agenda. No expectations. No requirements. Just a chat. Black Canyon Homes PIC: "Thomas B. Townsend House" by Jeffrey Beall is licensed under CC BY-SA 2.0.
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