NAR’s updated MLS policy, enforcing the required practice changes from the settlement, will become effective on August 17, 2024.
No. Broker compensation is not set by law and is fully negotiable.
Yes. Sellers are legally allowed to offer compensation to a buyer’s broker. The decision is entirely the seller’s.
Buyers frequently encounter various expenses throughout the home-buying journey, including moving expenses, homeowner’s insurance, contractor fees, down payments, lender and title company charges, home inspection and appraisal fees, etc. A seller’s home will compete with others, many of which may cover the buyer broker’s compensation. This could enhance their appeal by reducing the buyer’s upfront expenses at closing.
Information regarding compensation or bonuses offered to cooperating brokers must not be displayed anywhere within the MLS.
However, if permitted by the local MLS, sellers may choose to offer concessions to the buyer. The buyers in turn can use the concessions to cover expenses such as closing costs or the buyer’s agent’s commission. These concessions can be detailed in designated fields. Any listed concessions must not depend on using or paying a buyer broker.
Here are several ways it can be communicated:
When the listing broker or seller offers compensation for the buyer’s broker, the listing agent/seller can share this offer through different marketing avenues such as conversations with the buyer’s agent/broker, social media posts, flyers, signs, or emails. Brokers can also display compensation offers on their listings on their corporate websites.
Compensation remains subject to negotiation, is not set by law, and should always be discussed between listing agents and sellers.
Yes, that’s a possibility. If there’s no initial offer of compensation with the listing, the buyer may request that the seller include payment to their broker as part of their offer for the house. It’s important to consider whether some potential buyers might overlook the seller’s home in favor of others that include upfront buyer compensation.
Buyer’s brokers can contribute to a more professional transaction experience overall. This includes explaining the home buying process, setting expectations, arranging pre-approvals with lenders, showing homes, negotiating purchases, coordinating inspections, managing title insurance and closing services, and overseeing the myriad details required for a smooth home closing. Unrepresented buyers may face challenges navigating these aspects on their own.
NAR’s updated MLS policy, enforcing the required practice changes from the settlement, will become effective on August 17, 2024.
Yes, if the buyer’s broker uses and lists properties for sale on a Multiple Listing Service (MLS), the buyer needs to sign a written agreement before visiting any type of home together. This ensures transparency regarding the buyer’s broker services offered and their cost.
Consumers have the choice to decide whether to utilize a real estate professional. Studies have shown that consumers greatly appreciate the services offered by a buyer’s broker.
Per a NAR 2023 study, an estimated eighty-nine percent of home buyers used a real estate agent/broker to purchase their home.
No. Buyer’s broker compensation is not set by law and all agent compensation terms are entirely open to negotiation.
Yes. A seller is legally allowed to offer compensation to buyer’s broker.
Yes, that’s a possibility. If there’s no initial offer of compensation with the listing, the buyer may request that the seller include payment to their buyer’s broker as part of their offer for the house.
There are several ways in which a buyer’s broker can receive compensation for their services:
a) The seller of the property a buyer is interested in has offered to pay a commission to the buyer’s broker
b) If the seller has not offered to pay a commission to the buyer’s broker, a buyer can include that requirement as part of the offer made on the property.
c) If the seller refuses to pay a buyer’s broker commission, the buyer would be responsible for compensating the buyer’s broker directly.
Note that the amount of the buyer’s broker compensation is negotiable and not fixed by law. The payment terms are detailed in the buyer-broker representation agreement a buyer signs upon hiring a buyer’s broker.
If the seller offers a buyer broker compensation but it is less than what the buyer has agreed upon in the buyer-broker agreement, the buyer may request the difference in broker compensation as part of their offer.
If the seller declines to cover the difference, the buyer would then be responsible for covering this amount.
Deciding when to sell a property depends on various factors, including market conditions, personal finances, and your specific goals. Here are some questions to consider:
Market Conditions: Is it a seller’s market or a buyer’s market? In a seller’s market, where demand exceeds supply, you might get a higher price for your property. Conversely, in a buyer’s market, prices might be lower, and it could take longer to sell.
Financial Situation: Do you need the money from the sale for other investments or expenses? If you have pressing financial needs or if the property is a drain on your resources, it might be a good time to sell.
Property Value: Have property values in your area been increasing or decreasing? If values have been steadily rising, selling now might mean a higher profit. If they’re falling, you might want to wait for a more favorable market.
Future Plans: Do you have plans to relocate, downsize, or invest elsewhere? If your current property no longer fits your lifestyle or investment strategy, it might be a good time to sell.
Tax Implications: Consider any tax implications of selling your property, such as capital gains taxes. Consulting with a tax advisor can help you understand the financial implications of a sale.
Condition of the Property: Is your property in good condition, or does it require repairs or renovations? A well-maintained property is likely to attract more buyers and command a higher price.
Market Trends: Are there any market trends or forecasts suggesting a change in property values or demand in the near future? Keeping an eye on market trends can help you make an informed decision.
Ultimately, the decision to sell your property should be based on your individual circumstances and goals. I would be more than happy to speak through this with you in person and provide guidance.
Pricing your home correctly is crucial for a successful sale. Here are some steps to help you determine the right price for your home:
Research Comparable Properties: Look at recent sales of similar homes in your neighborhood or area. These are known as “comps” or comparable properties. Consider factors such as square footage, number of bedrooms and bathrooms, condition of the property, and location. This will give you a baseline for pricing your home.
Consider Market Conditions: Assess whether you’re in a buyer’s market, a seller’s market, or a balanced market. In a seller’s market where demand exceeds supply, you may be able to price your home higher. In a buyer’s market where there are more homes for sale than buyers, you might need to price competitively to attract interest.
Consult a Real Estate Agent: A local real estate agent can provide valuable insights into your market and help you determine an appropriate price for your home. They can conduct a comparative market analysis (CMA) using recent sales data and consider factors such as current market trends, the condition of your home, and any unique features it may have.
Evaluate Your Home’s Condition: Be realistic about the condition of your home compared to other properties on the market. Consider any updates or renovations you’ve made and how they might impact the value of your home. If your home needs significant repairs or updates, you may need to adjust your price accordingly.
Price Strategically: Decide whether you want to price your home competitively to attract multiple offers quickly or if you’re willing to price higher and potentially wait longer for the right buyer. Your pricing strategy should align with your goals and timeline for selling.
Factor in Closing Costs and Negotiation Room: Keep in mind that buyers will likely negotiate the price of your home, so it’s essential to leave some room for negotiation while still pricing competitively. Additionally, consider any closing costs you may need to cover as the seller.
Monitor Market Feedback: Once your home is listed, pay attention to feedback from potential buyers and their agents. If you’re not receiving many showings or offers, it may be a sign that your home is priced too high, and you may need to adjust accordingly.
Curb Appeal: First impressions matter. Enhance your home’s curb appeal by maintaining the lawn, landscaping, and exterior appearance. Consider painting the front door, replacing or updating outdoor lighting fixtures, and adding potted plants or flowers.
Fresh Paint: A fresh coat of paint can do wonders for a home’s interior and exterior. Stick to neutral colors that appeal to a broad range of buyers. Paint walls, trim, and doors as needed to freshen up the space and make it feel clean and inviting.
Kitchen Updates: The kitchen is often a focal point for buyers. Consider making updates such as refacing or painting cabinets, installing new hardware, updating countertops, and replacing outdated appliances. Even small changes can make a big difference in the overall look and feel of the kitchen.
Bathroom Refresh: Update bathrooms with modern fixtures, such as faucets, lighting, and hardware. Consider regrouting tile, replacing old caulking, and updating vanity mirrors. A fresh coat of paint and new towels can also help refresh the space.
Flooring: If your flooring is outdated or showing signs of wear, consider replacing it with newer, more durable materials. Hardwood floors are often desirable to buyers, but quality laminate or luxury vinyl plank flooring can also offer a fresh look at a lower cost.
Lighting: Update light fixtures throughout the home to create a bright, welcoming atmosphere. Replace outdated or mismatched fixtures with modern, energy-efficient options. Consider adding task lighting in kitchens and bathrooms to improve functionality.
Energy-Efficient Upgrades: Consider making energy-efficient upgrades to appeal to eco-conscious buyers and potentially lower utility costs. This could include installing programmable thermostats, upgrading insulation, replacing old windows with energy-efficient ones, and installing LED lighting.
Declutter and Depersonalize: Before listing your home, declutter and depersonalize the space to allow potential buyers to envision themselves living there. Remove excess furniture, personal items, and clutter to make rooms feel more spacious and inviting.
Minor Repairs: Take care of any minor repairs or maintenance issues, such as leaky faucets, squeaky doors, chipped paint, or cracked tiles. Addressing these issues shows buyers that the home has been well-maintained and cared for.
Professional Staging: Consider hiring a professional stager to showcase your home in its best light. Staging can help highlight the home’s features, maximize space, and create an appealing atmosphere for potential buyers.
Setting the Right Price: Listing agents help sellers determine the optimal listing price for their home based on market conditions, comparable sales data, and the home’s features and condition. Pricing the home correctly is essential for attracting potential buyers and maximizing the sale price.
Marketing the Property: Listing agents create comprehensive marketing plans to promote the property to potential buyers. I provide unmatched marketing expertise in the Sarasota / Manatee County region.
Showcasing the Property: Listing agents coordinate showings and open houses to showcase the property to potential buyers. They provide guidance on staging the home to highlight its features and create an inviting atmosphere for buyers.
Negotiating Offers: Listing agents negotiate on behalf of sellers to secure the best possible terms and price for the sale of the home. They review offers, communicate with buyers’ agents, and advise sellers on how to respond to offers to achieve their goals.
Facilitating the Transaction: Listing agents guide sellers through the transaction process from start to finish. This includes assisting with paperwork, contracts, and disclosures, coordinating inspections and appraisals, and ensuring that all necessary steps are completed for a smooth closing.
Communicating with Sellers: Listing agents keep sellers informed throughout the selling process, providing updates on market activity, buyer feedback, and any developments related to the sale of the home. They address sellers’ questions and concerns and provide guidance and support every step of the way.
Navigating Challenges: Listing agents help sellers navigate any challenges or obstacles that may arise during the selling process, such as low appraisal values, repair requests, or issues with financing. They draw on their experience and expertise to find solutions and keep the transaction on track.
Professional Expertise: Listing agents bring their knowledge of the local real estate market, current trends, and best practices to the table. They leverage their expertise to advise sellers on pricing strategies, marketing tactics, and negotiation tactics to achieve the best possible outcome.
Using a buyer’s agent can help you save time, money and avoid potential pitfalls in several ways:
Negotiating Power: Buyer’s agents are skilled negotiators who can leverage their expertise and market knowledge to negotiate the best possible price and terms for the property you want to purchase. They can help you avoid overpaying for a property and ensure that you get the most value for your money.
Insight into Property Values: Buyer’s agents with neighborhood expertise can provide insights into property values and pricing trends in the area. They can help buyers understand what constitutes a fair market value for a property and identify opportunities for negotiation based on their knowledge of recent sales and market conditions.
Identification of Suitable Properties: A buyer’s agent who specializes in a particular neighborhood can quickly identify properties that meet the buyer’s criteria and preferences. They can filter listings based on factors such as price, size, condition, and location, saving buyers time and effort in their property search.
Access to Off-Market Listings: Buyer’s agents often have access to off-market listings and pocket listings that may not be available to the general public. These listings can sometimes offer better value or less competition, giving you an advantage in your property search.
Guidance on Comparable Sales: Buyer’s agents can provide valuable insights into recent comparable sales in the area, helping you understand the true market value of a property. This information can empower you to make informed decisions and avoid overbidding on a property.
Identification of Potential Issues: Buyer’s agents are trained to identify potential issues with properties, such as structural defects, code violations, or other red flags that could impact the property’s value or your ability to secure financing. They can help you avoid investing in a property with hidden problems that could lead to costly repairs down the line.
Recommendations for Inspections and Due Diligence: Buyer’s agents can recommend reputable home inspectors, appraisers, and other professionals to conduct due diligence on a property. They can help you understand the results of inspections and assessments and negotiate repairs or concessions with the seller based on their findings.
Protection of Interests: Buyer’s agents work exclusively on behalf of the buyer and owe them fiduciary duties, including loyalty, confidentiality, and full disclosure. They prioritize your interests throughout the buying process and can provide guidance on legal and contractual matters to ensure your rights are protected.
Streamlined Process: Buying a home can be complex, with multiple steps and potential pitfalls along the way. Buyer’s agents can help you navigate the process from start to finish, saving you time and stress. They can handle paperwork, coordinate appointments, and ensure that all necessary steps are completed for a smooth transaction.
Whether or not to buy a real estate property now depends on several factors, including your personal circumstances, financial situation, and goals. Here are some considerations to help you make an informed decision:
Market Conditions: Evaluate the current real estate market conditions in your area. Is it a buyer’s market, a seller’s market, or a balanced market? Understanding market dynamics can help you determine whether it’s a good time to buy. In a buyer’s market, there may be more inventory and less competition, potentially giving you more negotiating power. In a seller’s market, there may be limited inventory and more competition, making it more challenging to find a suitable property.
Interest Rates: Consider current mortgage interest rates. Low interest rates can make homeownership more affordable by reducing your monthly mortgage payments. If interest rates are low, it may be a favorable time to buy, as you could lock in a lower rate and potentially save money over the life of your loan.
Financial Readiness: Assess your financial readiness to buy a home. Do you have a stable income, a sufficient down payment, and a good credit score? Buying a home is a significant financial commitment, so it’s essential to ensure that you’re financially prepared for homeownership. Consider your budget, expenses, and long-term financial goals before making a decision.
Long-Term Plans: Think about your long-term plans and goals. Are you planning to stay in the area for several years? Buying a home can be a good investment if you plan to stay in the property long enough to build equity and recoup upfront costs such as closing costs and moving expenses. However, if you’re uncertain about your future plans or anticipate relocating in the near future, renting may be a better option.
Property Affordability: Determine whether you can afford to buy a property that meets your needs and preferences. Consider factors such as home prices, property taxes, homeowners insurance, maintenance costs, and homeowners association fees. Make sure to factor in all associated costs to ensure that homeownership is financially feasible for you.
Market Trends and Forecasts: Research market trends and forecasts to get a sense of where the real estate market is headed in the future. While it’s impossible to predict with certainty, understanding market trends and forecasts can help you make an informed decision about whether to buy now or wait for a more favorable market.
Real estate is the largest asset class in the USA for several reasons:
High Value: Real estate encompasses a wide range of properties, including residential homes, commercial buildings, industrial facilities, and vacant land. These properties often have high monetary value, contributing to the significant size of the real estate asset class.
Long-Term Investment: Real estate is a popular long-term investment vehicle for individuals, families, and institutions. Many people view real estate as a stable and tangible asset that can generate rental income, appreciate in value over time, and provide diversification within an investment portfolio.
Intrinsic Value: Real estate has intrinsic value as a basic human need. People need shelter to live, and businesses need physical space to operate. This fundamental demand for real estate underpins its value and resilience as an asset class, even during economic downturns.
Leverage: Real estate investments often involve leverage, where investors use borrowed funds (e.g., mortgages) to finance a portion of the purchase price. This leverage can amplify returns and enhance the attractiveness of real estate investments, especially when interest rates are low.
Inflation Hedge: Real estate is considered a hedge against inflation because property values and rental income tend to increase over time in line with inflationary pressures. This makes real estate an attractive investment option for investors seeking to preserve and grow their wealth over the long term.
Tax Advantages: Real estate investments offer various tax advantages, including deductions for mortgage interest, property taxes, depreciation, and maintenance expenses. These tax benefits can help investors reduce their taxable income and increase their after-tax returns on real estate investments.
Diverse Opportunities: Real estate offers a diverse range of investment opportunities, including residential rental properties, commercial real estate, real estate investment trusts (REITs), real estate crowdfunding, and real estate development. This diversity allows investors to choose investments that align with their risk tolerance, investment goals, and financial resources.
Stability and Predictability: Real estate investments are often perceived as more stable and predictable compared to other asset classes, such as stocks or commodities. Rental income from real estate properties can provide a steady stream of cash flow, while property values tend to appreciate over the long term, albeit with fluctuations in the short term.
Why you may want to consider an older home:
Character and Charm: Older homes often have unique architectural features, craftsmanship, and character that can be appealing to buyers who appreciate historical charm and craftsmanship.
Established Neighborhoods: Older homes are typically located in established neighborhoods with mature trees, landscaping, and community amenities. These neighborhoods may offer a sense of history, community, and stability.
Mature Landscaping: Older homes often have mature landscaping and trees that provide shade, privacy, and aesthetic appeal. However, it’s important to consider the maintenance and upkeep required for mature landscaping.
Lower Purchase Price: Older homes may be more affordable to purchase compared to new construction homes with similar features and square footage. This can make them attractive to buyers with budget constraints or those looking to invest in a larger or more desirable location. But do keep in mind that home renovations are expensive these days.
Renovation Opportunities: Older homes provide opportunities for renovation and customization to fit your preferences and lifestyle. You can update and modernize the home according to your tastes, needs, and budget over time.
Why you may want to consider a new construction home:
Modern Amenities and Features: New construction homes often come with modern amenities, features, and energy-efficient technologies that can enhance comfort, convenience, and sustainability. These may include open floor plans, smart home systems, energy-efficient appliances, and contemporary designs.
Customization Options: Buying a new construction home allows you to select design options, finishes, and upgrades to personalize the home to your preferences and lifestyle. You can work with the builder to create a home that meets your specific needs and aesthetic preferences.
Low Maintenance: New construction homes typically require less maintenance and repairs compared to older homes, as they come with new appliances, systems, and building materials that are under warranty. This can save you time and money on maintenance and upkeep in the early years of homeownership.
Warranties and Guarantees: New construction homes often come with warranties and guarantees from the builder, providing added peace of mind and financial protection against defects or structural issues. These warranties may cover structural components, appliances, and workmanship for a specified period after closing.
Energy Efficiency: New construction homes are built to modern building codes and energy efficiency standards, which can result in lower utility bills and reduced environmental impact compared to older homes. They may feature high-quality insulation, efficient heating and cooling systems, and energy-efficient windows and appliances.
Here’s an overview of the typical homebuying process:
Get Pre-Approved for a Mortgage: Before you start house hunting, it’s advisable to get pre-approved for a mortgage from a lender. This involves submitting financial documentation and undergoing a credit check to determine how much you can borrow and what interest rate you qualify for. A pre-approval letter strengthens your offer and shows sellers that you’re a serious buyer.
Find a Real Estate Agent: You may want to work with a real estate agent who can help you find properties that meet your criteria, arrange showings, and provide guidance throughout the homebuying process. Your agent will advocate for your interests, negotiate with sellers, and handle paperwork on your behalf.
Search for Homes: Begin your search for homes that fit your budget, location preferences, size requirements, and other criteria. Your real estate agent can help you search for properties on multiple listing services (MLS), attend open houses, and schedule private showings of homes that interest you.
Make an Offer: Once you find a home you want to buy, your real estate agent will help you prepare and submit a written offer to the seller. Your offer will include the purchase price, earnest money deposit, proposed closing date, contingencies (such as financing and home inspection), and any other terms or conditions you want to include.
Negotiate the Purchase Agreement: The seller may accept, reject, or counter your offer. Negotiations may continue until both parties agree on the terms of the purchase agreement, including the final purchase price, closing date, and any contingencies or repairs.
Complete Due Diligence: Once your offer is accepted, you’ll enter the due diligence phase, during which you’ll conduct inspections, appraisals, and other assessments of the property. This is your opportunity to uncover any issues or concerns with the home and negotiate repairs or credits with the seller if necessary.
Finalize Financing: Work with your lender to finalize your mortgage financing. This involves providing additional documentation, completing the underwriting process, and securing a loan commitment letter.
Close the Sale: Once all contingencies have been satisfied and financing is in place, you’ll attend a closing meeting to sign the final paperwork and complete the sale. This includes signing the mortgage documents, transferring ownership of the property, and paying closing costs and fees.
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