What do you pay your professionals? There’s the price, certainly. Value is the trade for what you get versus the amount it costs to get it. Time, money, results, trust — all these things blend together when we consider what we’ll fork over. And does that amount change when you consider how you will pay it? Financed, deducted, or a direct check — does the method impact the terms? We look at any professional we deal with in the refractions above: dentist, mechanic, financial advisor, esthetician, attorney, lender, and, most currently in the spotlight, real estate agent.
It is a fact that an agent’s commission has been negotiable for years. It is also a fact that most buyers didn’t pay much attention to their agent’s commission, as it generally was taken from the seller’s proceeds. Out of sight, out of mind. Yet this year’s rulings in class-action lawsuits around antitrust laws have brought how a buyer pays their agent’s commission to be at the front of the home-buying conversation. While every state has their own forms, rules and regulations, individual jurisdictions, and multiple listing services, things have changed in the 805.
The California Association of Realtors (CAR Buyer Representation Agreements) has issued forms that are both required and seek to give guidance on buyers’ rights, requirements, around this topic of representation. Now, timeframes, percentages, exclusivity, and even location are lined out and addressed with a buyer before an agent can be paid a dime for their time. The “Disclosure Regarding Real Estate Agency Relationship” has 13 pages of detailed specifics that outline what and how representation should be handled.