What You Need to Know! New Rules Go into Effect August 17th
We have some important updates that will impact both buyers and sellers in the real estate market, starting August 17th. Here’s what you need to know:
For Buyers:
Open Houses are about to become the most convenient and non-intrusive way to explore homes.
If you’re interested in viewing a property, you will now need to sign a Buyer Representation Agreement beforehand. These agreements can be either exclusive (working with one agent) or non-exclusive (allowing you to work with multiple agents). The agreement outlines that agent fees are negotiable and specifically addresses the agent’s earnings, the terms of the agreement, and how the agent will be compensated. This change formalizes the process of hiring an agent to assist you in purchasing real estate.
A new important question will arise whenever you see a home online, attend an open house, or inquire about a property with your agent: “What is the SOC (Seller Offer of Compensation)?” This term is crucial for buyers to understand, as it helps determine if the seller has included a budgeted credit in the price to cover your buyer agent fee. In the past, this wasn’t a concern because the industry typically recommended that sellers cover the Buyer’s Agent Commission (BAC). However, moving forward, there will no longer be a BAC, meaning you, as the buyer, will be responsible for this fee. The good news is that many sellers are still offering an SOC, as it simplifies negotiations and reflects the traditional practice where sellers factored in the BAC.
Every real estate sale agreement will now need to address how the buyer’s agent will be compensated. The fee may be paid out of the Seller’s Offer of Compensation, so be sure to discuss this with your agent.
For Sellers:
New listing agreements will no longer allow sellers to directly pay the Buyer’s Agent Commission (BAC), which has typically been 2.5% in Portland. The term BAC is now being replaced with “Seller Offer of Compensation” (SOC). As a seller, you won’t be able to directly pay the buyer’s agent commission, but you can choose to offer an SOC, which the buyer can use towards their agent’s commission, closing costs, or price negotiations.
Unlike the BAC, the SOC will not be published in the MLS. However, agents will still be able to communicate the SOC directly with other agents, buyers, and use it in their marketing efforts.
We’re here to guide you through these changes and ensure that you’re well prepared. If you have any questions or need further clarification, don’t hesitate to reach out. We’re excited to continue supporting you on your real estate journey!
CLICK HERE to learn more about how these changes affect seller strategies.