Page 22 - August 2024 Issue Web.pdf

DOLLARS AND SENSE by Tolbert Rowe

First Time Home Buying Gets Tougher and Tougher

As discussed in the June 2024, issue, transaction, the buyer, and the seller. a cafeteria menu, a buyer could pick
buyers are now responsible for paying This is not to say that they have not and choose exactly what services they
their agents’ commissions. No longer been doing this all along. This new would prefer, instead of a commission
are sellers allowed to pay the buyers ruling requires agents to be more based on the sale price of the property,
real estate agent as a condition of specific and transparent in everything as it has been.
having their property listed on they do to facilitate a sale of real estate
a Multiple Listing Service. As of for their respective party. If you are a buyer, you need to review
August 17, 2024, real estate agents and understand the buyer agent
Buying a home and using the services agreement, the services you will be
are required to have a signed buyer
of a real estate agent will require you to receiving, and exactly how the agent
agency agreement executed prior to
pay your respective agent. For the last will be paid. You, the buyer can pay it
showing property to potential buyers.
40 years sellers have understood that entirely. You can ask the seller to pay
As I write this in mid July, we have not
the fee they were being charged for it entirely. Or the fee can be shared.
seen the new buyer agency agreement
selling their property included paying Anything other than the buyer paying
approved by the Maryland Association
the party responsible for bringing a it in full will be negotiated in the
of Realtors.
buyer to the transaction, the buyers contract.
What we do know is that real estate agent. This total fee was traditionally
agents who work with buyers will 5%-6% and split equally between the Keep in mind that every dollar of
have to justify the fee that they will be listing agent and the selling agent. the buyer agents commission that
receiving. Sellers will only be allowed the seller agrees to pay is reducing
Under the new guidelines, the listing the amount of net proceeds they
to pay their agents’ fee for their
agent fee and the selling agent fee are will receive after all costs of the sale
services. Sellers cannot be required
established separately in the listing have been deducted. Your agent will
to agree to pay any of the buyers’
agreement and the buyer agency discuss with you how this could put
commissions or fees as a condition
agreement. The buyer’s agent cannot your offer at a disadvantage if other
of having the property information
receive compensation that exceeds contracts are submitted without seller
included in a Multiple Listing Service.
the fee agreed to in the buyer agency financial contribution. This will have a
This does not mean that the seller is
agreement. This effectively eliminates disproportionate impact on first time
“prohibited” from paying the buyers
any bonus to a buyer agent. homebuyers who traditionally have
agent. If negotiated in a contract of
sale and the seller agrees to pay any or limited funds. I do not believe that this
All these changes require real estate
all the buyer agents fee, it is acceptable. ask will be a surprise to sellers since
agents to explain and disclose in more
their listing agent will have alerted
detail exactly what services they are
All the changes we are seeing forces them of the possibility.
going to provide. It is possible that a
real estate agents to justify their
real estate agent could charge specific Now more than ever, regardless of how
compensation from each party in the
fees for specific services. Much like a buyer compensates the agent, it is
extremely important to have all your
financing in place before you make
your offer.
“Your Mortgage Consultant Since 1985”
Purchase or Refinance Historically, buyers have been pre-
approved for a mortgage where a
lender or loan officer has reviewed
pertinent financial information of the
buyer and determined that they are
qualified for a specific loan amount
115 E Dover St. Ste 3 - Easton, MD using a certain loan program. It does
not mean that the buyer is actually
tolbert@baycapitalmortgage.com C. Tolbert Rowe,
www.baycapitalmortgage.com NMLS Vice President/Lending “approved” for a loan. Detailed
182844 documentation and credit have not
been reviewed and submitted to
410-819-3005 / cell 410-310-3520 underwriting.
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