It’s been a week since the major shift in real estate, marked by the decoupling of commissions, which has introduced a new layer of responsibilities between Realtors and their clients.
This change specifically impacts Realtors and, while all Realtors are licensed agents, it’s important to note that not all licensed agents are Realtors. This distinction has led to some confusion about the rules that most Multiple Listing Services (MLS), including our local MLS, have adopted regarding compensation, cooperation and concessions.
Real estate licensees, regardless of their Realtor status, can belong to the MLS. This is why MLSes across the nation have implemented these changes and rules for all their members, not just those who are Realtors. The State of California is now poised to clarify that all real estate licensees – not just Realtors – must adhere to the higher level of care that the National Association of Realtors (NAR) has already enacted as of Aug. 17, 2024.
California Assembly Bill 2992, authored by Assemblymember Stephanie Nguyen, passed the Senate on Aug. 15, 2024. If signed by Governor Gavin Newsom, this bill will bring significant changes to real estate practices in California, further codifying these new rules into state law, particularly regarding buyer representation agreements.
The bill requires that a buyer’s agent and the buyer sign a buyer representation agreement no later than the time an offer to purchase real estate is made. This agreement ensures that all parties involved in the transaction have clearly defined roles and responsibilities, promoting transparency and accountability. The agreements are limited to a maximum of three months, and any renewals must be in writing, with no automatic renewals allowed.
Non-compliance with this new requirement could result in hefty penalties, with fines reaching up to $2,500. This underscores the importance of proper communication and documentation in real estate transactions. While these changes have sparked many questions and differing opinions within the industry, the necessity of staying informed and compliant with regulatory requirements cannot be overstated.
Some may seek workarounds or challenge these new rules, but most Realtors advocate for transparency and accountability in their practices. The State of California’s efforts to adopt these new MLS rules into codified law will create a uniform standard that applies to all real estate practitioners, not just some.
California Assembly Bill 2992 is currently awaiting the governor’s signature and, if signed, it will take effect on Jan. 1, 2025. As this date approaches, it’s crucial for both buyers and agents to understand and prepare for these changes to ensure a smooth and compliant real estate transaction process.
If you’d like to learn more about the current local market conditions, reach out to Theresa Grant, Real Estate Broker (DRE #01202881), at Theresa@HomesInLakeArrowhead.com. You can also follow on social – Instagram: @theresagrantrealtor|YouTube: @theresagrantrealtor. Theresa is a Broker Associate with Coldwell Banker Sky Ridge Realty.
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