2024 California Real Estate Changes

As clients and friends of 35 Oaks, I wanted to inform you about some important updates that will impact you as a home buyer or seller in your upcoming real estate transactions. These changes stem from a recent settlement by the National Association of REALTORS® (NAR) regarding broker commissions and real estate services. Effective August 17, 2024, these updates aim to ensure buyers and sellers are fully informed of the services provided by their agents and how these services will be compensated.

Key Changes to Note:

1. Buyer Agreements Now Required: Real estate brokers must now have written agreements with buyers prior to representing them or touring properties.  At 35 Oaks, this agreement will clearly outline how the broker will be compensated and the terms of your exclusive agency relationship.  While many states already require such agreements, this settlement standardizes these practices across the industry.  
2. Offers of Compensation Removed from the MLS: Property sellers and the broker representing them are no longer allowed to advertise any buyer’s agent compensation in the MLS.  The spirit of the settlement aims to have sellers negotiate and contract for their listing services, and for buyers to do the same. 
3. Transparent Contracts and Conversations: Agents are required to provide specific and clear information regarding their compensation, including the amount and how it’s determined.  For buyers, this will include a conversation regarding compensation for representation in a real estate transaction and ways in which this can be structured into an offer with a request for the seller to pay.  For sellers, this will include a conversation regarding listing services pricing, navigating represented and unrepresented buyers, and closing cost concession options to consider.
4. The Bottom Line: Any compensation agreed upon must be fully disclosed and negotiated between the broker and their client, with an open discussion regarding terms and expectations.  Every scenario and property is unique, with varying offer terms, market conditions, and circumstances surrounding the sale – because of this, it is best to educate yourself, partner with a knowledgeable broker, and develop an adaptive approach to navigate your next steps. 

What This Means for You: If you’re planning to buy or sell a home, and intend to be represented by a real estate broker, you will need to have a detailed conversation, ask questions, and document everything in a written agreement.  This contract will clarify the services provided and associated costs, including compensation, which remains fully negotiable between broker and client.

Visit the National Association of Realtors' website for additional information for home buyers and sellers:  NAR Settlement: Get the Facts

Please contact us with any questions or to arrange a meeting to discuss your real estate needs.