Updates on The New Real Estate Commission Law 2024 with Realtor Javier Gonzalez - Episode #141
/Hey Miami, Hal Feldman here!
Just finished webcasting another episode of The MiamiHal Real Estate Show with my esteemed colleague, Javier Gonzalez. And let me tell you, this one was a rollercoaster! We took a deep dive into the murky depths of real estate commissions, dissecting the new laws, forms, and market trends that are turning the industry on its head.
Why all the noise about the new commission law?
As Javier and I discussed, the real estate world is constantly evolving. Recent lawsuits have triggered significant changes in how we handle commissions, especially when disclosing them on the Multiple Listing Service (MLS). Remember those days when buyer's agent commissions were prominently displayed on the MLS? Ancient history!
So, what exactly has changed?
The Listing Agreement Revamp: Sellers now face a trifecta of options (10A, 10B, and 10C) for structuring commissions on their listing agreements. While it might feel like a case of "same difference" (we essentially have the same options as before!), the crucial distinction lies in how these options are presented and the implications for negotiation. My two cents? 10C is the winning ticket, providing sellers with the freedom to negotiate without prematurely revealing their hand.
Addendum Avalanche: We're practically buried in addenda! It seems like every time I turn around, there's a new form to attach to the contract. The latest additions to this ever-growing pile, FF and GG, link the buyer's broker agreement and the listing agreement to the contract. It's enough to make even a seasoned real estate veteran like myself feel like a newbie!
Buyer Broker Agreements: No Longer Optional, But Essential: Realtors® are now mandated to have a buyer broker agreement in place before showcasing any properties or divulging MLS search results. This ensures buyers have professional representation and establishes a transparent payment structure from the get-go. However, as Javier astutely pointed out, it also adds to the closing costs for buyers, potentially hindering their ability to secure the best mortgage terms.
Explaining the Listing Agreement’s Commission Options
new listing agreement’ buyer Broker’s compensation. Source 2024 florida realtors
Let's break down those listing agreement options a bit further:
10A: This option maintains the traditional approach, where the listing brokerage receives the full commission and then shares a portion with the buyer's broker. While familiar, it lacks the strategic advantage of 10C.
10B: With this option, the seller pays the listing brokerage directly and offers a separate commission directly to the buyer's broker. This creates a more distinct separation between the two commissions.
10C: This is where the magic happens! 10C allows the seller to keep their commission strategy under wraps, providing greater negotiating power. It's all about maintaining flexibility and maximizing the seller's position.
The Case for 10C
Imagine this: a buyer's agent comes in with an offer, and the seller, armed with 10C, can assess the entire package holistically. They can weigh the offer price, terms, and contingencies without being locked into a predetermined commission split. This empowers the seller to negotiate more effectively and potentially secure a better deal.
The Vanishing Concessions on the MLS
Adding another layer of complexity to this commission puzzle, the MLS initially introduced fields to indicate whether a seller was offering a concession to the buyer. But just when we started to get a handle on this new feature, poof! The MLS decided to remove those fields, leaving agents and consumers alike in a state of bewilderment. It's a classic "hurry up and wait" case in the real estate world.
Beyond Commissions: The Current Market Climate
Aside from the commission chaos, we also delved into the prevailing mood of the Miami real estate market. Things are relatively subdued now, with buyers exercising caution due to the looming elections and the unpredictable dance of interest rates. Speaking of which, remember my bold prediction about the Fed slashing the rate by half a point? Bullseye! And I'm doubling down – anticipate another quarter-point reduction in November and December.
The Importance of Buyer Broker Agreements
While the new requirement for buyer-broker agreements might seem like an extra hurdle, it serves a crucial purpose. It protects buyers by ensuring they have dedicated representation throughout the transaction. It also fosters transparency by clearly outlining the agent's responsibilities and compensation.
A Word on Leasing
We briefly touched on the leasing side of the equation, which, thankfully, hasn't been as dramatically impacted by these recent changes. The standard practice of either a monthly fee or a percentage of the gross annual lease amount remains the norm.
The MiamiHal Difference
In a world of constant change and uncertainty, one thing remains constant; my commitment to providing top-notch service to my clients. I'm here to guide you through the complexities of the real estate market, ensuring a smooth and successful transaction. Whether you're a seasoned investor or a first-time homebuyer, I'll be your trusted advisor, advocate, and friend.
Want the whole picture? This blog post is just a glimpse into our in-depth conversation. Head back to the full video to catch everything we said in detail.
Need a seasoned professional to navigate this ever-shifting real estate landscape?
Whether buying or selling, these new regulations can be a minefield. That's where I excel! With over two decades of experience in the Miami market, I can help you decipher the complexities and ensure a seamless and successful transaction. Give me a call!
Stay tuned for more insights, and remember… knowledge is your most valuable asset in the real estate arena!
Hal Feldman,
Your Miami Real Estate Agent
RE/MAX Advance Realty
