New Indiana real Estate law CHANGES
ATTENTION BUYERS & SELLERS!!
Indiana real estate laws have changed, effective July 1, 2024!
WHAT DOES THIS MEAN TO YOU??
As a result of two major anti-trust lawsuits filed in 2019 (Sitzer-Burnet & Moehrl) as well as other copycat suits filed nationally within the past 12 months primarily related to the payment of Buyer-Broker commissions, the National Association of Realtors entered into a national MLS Antitrust Settlement mandating both forms and practice changes in the real estate industry. Multiple listing services that have joined in this settlement will now require brokers representing buyers to obtain a written agreement that clearly discloses key information about their compensation prior to showing a property to their buyer. In our area the Multiple Listing Service of Southeastern Indiana has indicated their new rules complying with this settlement will take effect on August 1st. These changes are being implemented on varying schedules in different states, but will apply nationwide effective August 17, 2024. Effective July 1, 2024, Indiana law now requires all buyers to sign a written Buyer Agency Contract with a Realtor before that Realtor provides any agency services, particularly writing a purchase agreement on a property. Effective August 1st, BUYERS WILL BE REQUIRED TO SIGN A WRITTEN BUYER AGENCY CONTRACT with a Realtor BEFORE LOOKING AT A PROPERTY! In addition, co-op commissions (those paid to the Selling Broker by the Listing Broker for bringing a qualified buyer and assisting in completion of the successful sale of a property) will no longer be published in the MLS systems after August 7th in our area, and after August 17th nationwide.
WHY?
Sellers who sued charged that they unjustly paid the Buyer’s Broker, rather than the Buyer paying their agent directly for the services they provided. The Indiana Association of Realtors model Listing Agreement now provides Sellers with the opportunity to select whether or not they want to offer co-op commission (through their Listing Broker) to Buyer Brokers who bring a buyer who purchases their property, or whether they feel the Buyer should pay their own Broker directly.
SO WHAT HAPPENS NOW?
A written Buyer Agency Contract is really just like the Listing Contract that the Seller signs prior to putting their property on the market. Just like Sellers research various real estate brokerages and brokers before deciding who they want to represent them, Buyers will need to do the same thing. The Buyer Agency Agreement defines what type or types of properties the Buyer is looking for, including size, location, features, price, etc. It can be as specific or as general as both parties agree. It has a start date & an expiration date, & it can be amended as needed. It defines what the Buyer Broker’s commission will be if the Buyer purchases a property that falls within the description on the contract. It also clearly states that the Buyer’s Broker will make every effort to have that commission paid by either the Listing Broker or the Seller. If neither of those parties will pay enough commission in the transaction to cover the agreed upon commission in the Buyer Agency Contract, then the Buyer will owe the balance.
WARNING!! DO NOT SIGN MORE THAN ONE AGREEMENT, BECAUSE YOU COULD BE LIABLE TO PAY COMMISSION TO MORE THAN ONE REALTOR IF YOU DO!!
Here are links to several videos that should help to explain this further…
From the Southeastern Indiana Board of Realtors:
https://vimeo.com/987304338?share=copy
NAR Settlement Resources for Buyers and Sellers
https://www.nar.realtor/the-facts/homebuyers-what-the-nar-settlement-means
https://www.nar.realtor/the-facts/home-sellers-what-the-nar-settlement-means
THIS IS A COMPLEX CHANGE THAT WILL REQUIRE EXPLANATION & GETTING USED TO. I’D LOVE TO HELP YOU, AND HOPE TO BE ABLE TO GUIDE YOU THROUGH THIS CHANGE IN ORDER TO SUCCESSFULLY PURCHASE OR SELL YOUR PROPERTY.
I’D LOVE TO MEET WITH YOU TO DISCUSS YOUR QUESTIONS & NEEDS IN MORE DETAIL! Call me at 513-535-2877 for a private appointment.
Kathy Patterson
Broker/Co-Owner
Premier Properties Real Estate