Latest / Connor with Honor: AI, Real Estate and Real Life / What will you pay your buyer's agent when buying your next home?
Transcript
- 0:00in real estate some changes involve what a buyer will sign to view homes this stem from a judgment against the National Association of Realtors and is supposed to clear the waters and protect all buyers and sellers better some consideration for home buyers now that this is a rule you may have found a real estate agent willing to show you homes without any of this new buyer broker contract you should definitely throw caution to the win so butter up Buttercup my ex cop mind thinks of it this way if that real estate agent is willing to sacrifice their license in order to show homes because they don't agree with the decisions handed down by the court I'm wondering what other things they may sacrifice will they sacrifice me are you reading what you're signing I know this seems like the way it should be but lately I received a call where the caller stated that they signed something to be home with another agent but they're not sure what they signed and they don't have a copy they called because they don't like that agent want to hire me and I wasn't sure where to go with that they don't have a copy of it I asked them to go back to the document signing service these are these online signing systems they make it incredibly easy for you to execute a contract between you and another party whenever you do this I've always found a good practice to print this out I understand we're in a technological world and I'm not sure if everybody even has a laptop anymore most everybody works for their phone however it is important to hold this in your hand and to look at it because it is stuff that could potentially be coming out of your pocket however what's important is you need to know what you're signing if the agent states in the contract that they're going to be your sole representative for the next 90 days then there may be a problem firing them in my world if I have a client who is displeased with me and my services I'd happily let them exit any and all contracts as long as it didn't create a bind for them such would be the case if a home seller were an escrow with a buyer they would need the buyer's approval to cancel in that regard but in most cases the cancellation of the buyer contracts are not that spicy when done correctly between the buyer and the agent they don't want to work with any longer it's just gonna maybe take a couple phone calls and a couple follow up emails maybe even a discussion with the buyers broker or some other entity that has power another item to notice there are ways in the contract the buyers broker agreement that limit properties to be included as part of the specific agreement between you and your real estate agent you can select a single viewing of a particular home you can select only homes located in a particular city like Valencia California for example and for the areas of sagas and steam and some Ranch you can exclude those wanting to use an agent that's more familiar with those specific areas you can say that only Santa Clarita real estate and homes are to be included but make sure you specify what city and those other items in that regard you can also have the contract reflect certain property types maybe you want a condominium specific agent to help you in that property type but you're also open to single family homes but you want to select an agent that represents those exclusively usually real estate agents handle all residential commercial agents may dabble back and forth with residential but if they're a serious commercial agent more than likely they stay away with residential on all levels unless of course there maybe behind the curve as far as income and they want to branch out again at the residential but typically it's gonna cover all of that what you will be paying that agent is also going to be included yeah that's the new one not really new but what you're paying the real estate agent on the contract the buyers broker agreement to represent you that's not really new and it has been something that's used in the past it's just not used very often or wasn't in the past the real estate agent could typically depend on the seller having agreed to a particular commission to represent you now that's the change folks in some circumstances that will still be the case I propose that this is the way it will be in the majority of cases but however it should be business that we as we've always conducted it with the addition of this additional contract the buyer broker agreement being implemented on a mandatory basis for the record the buyer broker agreement in some form has always been as I stated I have met many agents that only showed homes before the mandatory changes with assigned buyer broker agreement they said it was important and today those agents are well ahead of the curve being able to show their value where does that leave you well when buying a home you're gonna have closing costs and I discuss this in my Real estate 1 0 1 course these are things that are on top of the home price you are offering such as your lenders fee is part of the title fee your part of escrow fee that's about 3% typically and it depends on the home price and other factors but you should get a breakdown before moving forward with any offer to do this as my buyers do per my request with them being CC well on the acrestite on the request I generate on a fictional home but it's based on the number they've been approved for or the number they're willing to go up to with regard to making an offer so they can see those numbers and understand what those costs are going to be that way they know what they're getting into exactly and I love precision ask me on a good shooting day there's only so much money that can be applied or given as closing costs from a real estate lender it depends on the loan type and the lender type FHA loans VA loans they have strict limits conventional loans and very down payment types also have limits cash well then it's all up to you that may be one of the changes we'll start to see where the lenders will allow for more in the way of closing costs to start being applied to the buyer's agency this happens hasn't happened yet but time will tell the free estate sales slow down as a result of the changes today you may have to pay also your buyer's agent here's a doozy that other agents don't want to address the proverbial elephant in the room it's phrase like this why don't I just use the agent who the seller is paid to represent them in the sale of the home I've got an idea why don't you hire the attorney that's also representing those who with a nexus of the suit against you you don't because it's a conflict of interest does this apply apply to a real estate sale that's a good question not in all states and not in all countries California currently finds dual agency completely legal but just because something's legal doesn't mean it's a great idea you can but when they become your buyers agent and something known as dual agency where they represent the seller and now you on the same residence in that circumstance the seller is not willing if the seller is not willing to pay a buyer's agent then you'll have to pay the seller's agent to represent you it's not about fair it's about what the changes are presently there are several states that don't allow for dual agency the scenario where the home seller is also representing the home buyer on the same home it's dual agency it's legal in California not CA for Canada but California and there's a page of super small print that comes with this document explaining all the nuances and what it's about when it takes that much text to explain the document that you're going to be signing such as the one in California real estate that talks about dual agency when a relationship is formed between you and your agent my thought is to really take that decision seriously if the seller is going to pay their agent to be your agent they would be willing to pay your agent also if they aren't and the monies are all the same across the board I would think there is something that someone knows air quotes included that they may be trying to hide from the buyers and their agent is a part of it again the trust thing is a problem for me on all levels how about you what will you be willing to pay an agent to represent you will you go The 3% of the legendary real estate commission cost 2.5% less or more you'll need to look at your financial profile look at the property look at the value that the agent has that you're selecting and if the seller is not paying leave it up to your agent your agent's job is negotiation as well as mine I will ask for the offer to include my fee in the closing cost or the sellers cost the closing cost for the seller and we can take it from there but part of the negotiation is to have your agent get their representation fee paid by the seller which removes it from your side of the blogger however this is going to depend on how much value they can add and how negotiable the seller happens to be there are definitely many ways to negotiate on residence when people are writing offers those agents the savvy ones included should know their way around a way around this and should be able to explain all these items to you at the end of the day no real at well most real estate agents are not attorneys so all of these contracts are up to attorney understanding and conveyance I will do my best to help you throughout the entire process I'm Connor with honor when you're ready I'm here be well and thanks for listening I'm Connor Mcgyver over and out