New Real Estate Laws: What Buyers and Sellers in the Tri-Valley Need to Know

Buying a home is one of the most significant financial transactions most people will ever undertake. As such, it's crucial to have the guidance and support of a trusted real estate professional. In California, recent changes stemming from a National Association of REALTORS® (NAR) settlement bring several important updates that benefit homebuyers. Here, we break down what these changes mean for buyers and sellers in the Tri-Valley area, including San Ramon.

Key Changes for Homebuyers

1. Written Agreements Before Home Tours: Starting August 17, before you can tour a home with your agent, you'll need to sign a written agreement. This contract is essential as it outlines the terms and conditions you've negotiated with your agent. Ensure that you understand the services provided, the value offered, and the associated costs.

2. Clear Compensation Terms: The buyer agreement must now include specific details about the agent's compensation. Here are the four critical components:

• Disclosure of Compensation: The agreement must clearly state the amount or rate of compensation the real estate agent will receive or how this amount will be determined.
• Objective Compensation: The compensation must be definite and not open-ended. For instance, it cannot simply state that the "buyer broker compensation shall be whatever amount the seller offers."
• Prohibition of Excess Compensation: The agent cannot receive any compensation for brokerage services from any source that exceeds the agreed amount or rate in the agreement.
• Negotiable Broker Fees: There must be a conspicuous statement indicating that broker fees and commissions are fully negotiable and not set by law.

3. Applicability to Various Tours: These written agreements are mandatory for both in-person and live virtual home tours. However, if you're merely discussing services with an agent or talking to them at an open house, you do not need a written agreement.

4. Seller's Role in Compensation: Sellers can still offer compensation to your agent, but this information cannot be shared on a Multiple Listing Service (MLS). MLSs are local marketplaces used by both buyer brokers and listing brokers to share property information.

Implications for Sellers

For sellers in the Tri-Valley area, these changes mean a few adjustments in how you work with your real estate agent and potential buyers' agents:

• Transparent Compensation Offers: When offering compensation to a buyer's agent, this information cannot be included in the MLS listing.
• Understanding Buyer Agreements: Be aware that buyers touring your home will have signed a detailed agreement with their agent, which includes clear terms about agent compensation.
• Negotiation Flexibility: Remember that all broker fees and commissions are negotiable, providing you with the flexibility to discuss and adjust terms that work best for your situation.

Navigating the New Landscape

As these new practices come into effect, both buyers and sellers in the Tri-Valley area should take the time to understand and adapt to these changes. Here are some tips to help you navigate this new landscape:

• For Buyers: Always review and comprehend the written agreement with your agent before touring homes. Don't hesitate to ask questions and negotiate terms to ensure you receive the best possible service and value.
• For Sellers: Work closely with your listing agent to understand how these changes affect your property listing and compensation offers. Be prepared for negotiations and ensure that all terms are clearly communicated.

By staying informed and proactive, both buyers and sellers can successfully navigate these new regulations and achieve their real estate goals in the Tri-Valley area. If you have any questions or need further guidance, don't hesitate to reach out to a trusted REALTOR® in your community.

Our team, Asante Reatly, recognized as the #1 team in San Ramon, is committed to help you fulfill your real estate dreams. Call us today at 925-415-0835 to start your home buying or selling journey with a realtor you can trust for a lifetime!