A new bill in the California legislature could create a three-month time limit on the homebuyer agent contracts required under the National Association of Realtors (NAR) settlement.
The San Jose Mercury-News reported Assembly Bill 2992 would require the contracts spelled out in the NAR settlement, which will require buyers to pay their agents’ fees unless they can convince sellers to absorb those costs or unless the buyer is a corporation, limited liability company or partnership. The contracts will have to be signed before buyers can bid on a home and must detail agent compensation.
Currently, 19 states require buyer representation agreements, with a similar law taking effect in Oregon on Jan. 1. The NAR settlement changes go into effect on Aug. 17.
“Without legal protection, buyers and brokers are susceptible to potential disputes overcompensation, legal uncertainties and conflicts of interest,” said the bill’s author, Assemblymember Stephanie Nguyen, D-Elk Grove.
If passed, the new bill would take effect Jan. 1. But while the bill won approval from the state Assembly and two Senate committees without opposition, it would need to go through a “suspense” hearing – a requirement for legislation creating a fiscal impact of $150,000 or more to a state special fund – prior to the legislature’s adjournment on Aug. 31. California’s Department of Real Estate estimated that enforcement and administrative costs related to the bill would cost more than $800,000 a year.
It is amazing what all these woke states want to do to an established industry. The ones who will be hurt the most are exactly the ones they claim to protect. Clearly our country has too many lawyers who are trying to make a buck. Perhaps it is time that the country adopt laws limiting how many lawyers can practice in this country. That could limit the number of these ridiculous lawsuits
What amazes me me is all of this required” change is from an organization Not the Department of real estate or a law making body!
If you, as a real estate agent or broker do not belong to Nar you are not required to use their forms or comply with their punishment. Yet it seems the state is now trying to makeIt so ALL agents are being punished with. NAR
amen!
This has nothing to do with being a ‘woke’ state, it all started in Missouri, not too ‘woke’ there. CA is just trying to figure out how to navigate the DOJ involvement and denial of their initial forms.
These laws are funded by the corporations who will mop up all the aging properties resulting from no one showing them!!! See how it works America! The corporations – owned by Blackrock- will buy all the bargains and cash in on profits by saving commissions the agents were robbed of! You will own nothing and be happy! Your rent will be paid to the corporations who buy up all the homes when prices collapse! LAWFARE! ILLEGITIMATE LAWSUIT and Settlement – designed for this outcome!
Amen, Austin T. I do not think prices will collapse as long as there’s a housing shortage, but the corporate billionaires with their sophisticated algorithms, will certainly soak-up the inventory everywhere it is profitable to do so. We will have less transparency, not more. I feel so sorry for our poor first-time buyers. Where is justice for them? Our first-time owner-occupied buyers will instead become the 21st century version of sharecroppers – beholden to the oligopoly corporate entities that own all the SFR real estate. Forget about growing equity. Forget about retiring with a “paid-for” house. Forget about retiring, actually. By the way, does anyone acknowledge that it was the real estate industry that created and PAID-FOR the various local and regional MLS systems across the United States to begin with? Did this help buyers and sellers? Yes! Who usurped the labor-intensive information gathered for MLS input and claimed all the information as their own? Every parasite on the internet! I guess when you can kill two birds with one stone, it is a good aim, so good aim, oligopolies. You’ve eliminated the competition to buy, and also the competition when you decide to sell.
Perhaps too the DOJ can investigate the entire legal profession. Oh wait that will never happen since DOJ ARE lawyers!!!
Lawyers do not randomly file lawsuits.They are hired by someone. They are simply the conduit. Too many people blaming the lawyers, and the real question should be WHO are the plaintiffs?
Oh! This is the lawyers, and now they are hiring people to make calls, act as buyers and try to find new ‘guilty’ agents they can sue. Nice try though
Before you put the blame on the “woke” state, you may want to consider that all the changes part of the settlement with NAR are due to lawsuits filed in Illinois and Missouri! I may agree that lawsuits are way too easy to file and there are too many lawyers looking for the big payday, but the origin of legal actions is from middle of the country states.
Wake up America! This is what Democrats do. And we are heading toward 4 more years of this stuff? Trump had a policy while he was in office that for every new law two had to be removed.
😂
I’m still po’ed at NAR for letting us down, as usual. Whatever we paid the lawyers to defend us should be totally refunded. And, by the way, I agree with Pete F. The progressive Democrats are trying their best to make this a socialist society, not a free enterprise country. Vote your livelihood, REALTORS.
Although I consider Colorado a woke, or socialist state, they are refusing to comply with this lawyer driven cave in by the NAR. I see many members of the NAR dropping out for not fighting it further. New Jersey Socialist Governor made the changes mandatory on August. He couldn’t wait, he wanted to be the first to put the screws to Realtors!
Hit the nail on the head Elaine, thank you!
No need to make a big comment. Those that already commented have said it all accurately!!
This is LAWFARE- the underlying lawsuit has no merit – NAR SOLD OUT- sellers always had the ability to negotiate all commission they paid both to listing and buyers agents- they could pay a full service listing agent 3% or negotiate down to 1% or a dollar amount to whoever would accept it! If a brokerage refused their offer it was on to the next cheapest LA who would take their listing ! As for buyers agents- the owner/seller had one requirement which was if you want to be on the MLS you must agree to pay some amount ! Any amount ! The seller could write $1 and list the property for buyers agents to see! That is freedom and free market! Buyer’s agents decide if they want to show the property – the seller always and still has the freedom to list themselves on Zillow and pay no commissions – or ForSale by owner ! They could even chose a limited listing and show the property themselves and set the buyers commission at a flat dollar amount ! All the options existed ! There is no basis for the lawsuit or settlement!Now they expect buyers agents to have to get a contract signed by new buyers agreeing to pay them 3% or some indiscriminate amount before they find the house or negotiate a deal? And they say the sellers are not allowed to pay more than what the buyer’s agent has in the contract with the buyers? How is this lawful? The two agreements have different parties ? The settlement can not dictate how much a seller can pay a buyers agent subject to another unrelated contract? This entire settlement is LAWFARE- FAKE – to collapse the housing prices and remove commissions so corporations can buy up the depressed market with immediate 6% savings and Americans become Renters! Thanks NAR for selling out the realtors! And listing agents will also be replaced by employees of Zillow, Realtor.com, Homes.com . STAND UP to this Fraud!
💯 agree
@Tracey Powers I agree with what you said. But Brokers, Agents, and MLS’s can take back their power by no longer allowing our listings and our data to be displayed in Zillow, Realtor.com, and all over the internet. Real Estate Agents have lost their value in the eyes of the consumer because consumers can easily access all of our data all over the internet that they don’t think they need Real Estate Agents like they did back in the early 1990’s. Zillow and Realtor.com have become rich by using our listings and our data. Now they are using our own data against us by trying to eliminate the consumer’s need for our services. Every Broker and Agent need to wake up!
I agree on all points, well said and true. I have been a Realtor for 28 years and I’ve already seen the start of the chaos.
With all due respect to everyone’s opinion and their political persuasion, and their disdain for attorneys, NAR encouraged the settlement to occur and should be eliminated as an organization which spends its time and our money (I am a Realtor and therefore a mandatory dues paying NAR member) justifying their existence, and securing their virtually exclusive control of the real estate transaction process, instead of promoting fairness and transparency by eliminating the NAR and the nearly 1000 MLS monopolies.
No one at NAR every asked me about this settlement they engineered. I suppose it is possible they reached out to agents for input, and somehow I missed those communications.
When the MLS’s listed compensation paid to buyer agents it was transparent. One could look through the last ten or twenty sales to see the compensation that was offered in a particular area, or price range. It was transparent. Agents, Sellers and Buyers had access to this information. Starting today that information will not be easily available. It would be necessary to call ten or twenty agents to ask about the compensation. It isn’t certain that they would be allowed to disclose that information.
The lawyers at DOJ have some agenda. It seems they are against the idea of cooperating compensation altogether. They might be against the concept of buyers’ agents. If I had a week to stop working I suppose I could research their motives.
I cannot agree more with all of the above
However, let’s take this to the next level if any or all of you have any political connections back to the Republican party let your ideas and thoughts be known concerning the matter of the NAR settlement surely somebody in the RNC would be able to bring this to the attention of our candidate the number one realtor in the Country
If nothing else don’t forget where we have been in this matter and what the potential means for us collectively and personally on November 5, 2024
Amen brother Len
I suppose that we’ll all adapt to the new rules, however it becomes painfully obvious that in the efforts of the NAR to settle the lawsuit that they gave away, way too much. The NAR and its attorneys have asked us to enter into buyer contracts with buyers that they themselves would never consider signing as consumers. It’s all very awkward
for both the buyer and agent! First of all there is no guarantees that we’ll ever get paid since commissions are 100% negotiable throughout negotiations. Second, we will now be at odds with our customers. Will we be negotiating for them or for us? Third, our first time buyers will be hurt the most and when put in a situation “during negotiations” where a seller is unwilling to contribute to a buyers broker compensation, it is possible that we may not get paid or just minimally compensated. Even when or if a buyer is willing to sign an agency/compensation agreement prior to seeing properties, what are the odds that the buyer can make good on that compensation if they have on additional funds? Let’s hold the buyers feet to the fire while the seller makes bank on their additional proceeds.
Good buy perfectly good disclosure and welcome to the new doggy eat dog world….
The only way out of this mess is for all lenders to step up and allow buyer broker fees to be part of the loan. It shouldn’t be so difficult to do. Buyers were already paying both sides of the commissions with their mortgage. Yes, they were, because it was built into the price. VA is now allowing this and the rest of mortgage lenders will have to follow suit or they won’t do much business either.