The A,B,C's Oh, and D's of the NAR Settlement for Buyers

 Do You Know the “ABCs” of the ABCD Form?

(Copied in it's entirety from California Association of Realtors....

so none of my opinions are here, well one is at the bottom.)

The Anticipated Broker Compensation Disclosure (“ABCD”) is an excellent way to inform the buyer about the buyer broker’s compensation and can help to confirm the parties’ negotiations and discussions about compensation.  The ABCD form contains three sections that each serve different purposes.  Specifically, the ABCD form will : 1) Inform the buyer that the broker expects to be paid for the broker’s efforts; 2) Identify any compensation offered to the buyer’s broker from the seller’s broker through the MLS, or via a Cooperating Broker Compensation Agreement; and 3) Confirm and provide documentation to the buyer of any payments actually received by the buyer’s broker from third parties, in the event the buyer closes a transaction. 

Recently, C.A.R. has received several questions from members about using buyer representation agreements.  In addition to using the Buyer Representation and Broker Compensation Agreement (“BRBC”) in transactions, the ABCD form is a very good way to disclose the details of buyer broker compensation and to help the buyer become informed about compensation issues.  The ABCD form may also be a useful way to initiate and support the discussions and negotiations conducted between the buyer’s agent and buyer.

The ABCD form was released in December 2022, along with the release of the BRBC.  C.A.R.’s Standard Forms Committee recognized that on the seller’s side, it is normally easier for a listing agent to disclose and confirm the listing agent’s compensation via a listing agreement or single party compensation agreement.  Accordingly, at the beginning of the relationship between a seller and their agent, the seller knows the compensation they are paying their agent and the closing disclosure will show the amount of broker compensation that is a seller expense.  In comparison, on the buyer’s side, there are various ways to structure a buyer broker’s compensation– the buyer’s agent might use a buyer representation agreement, a Cooperating Broker Compensation Agreement, obtain a Single Party Compensation Agreement from the seller, or rely on an offer of compensation in the MLS. Because of the variety of methods in which a buyer’s broker can be compensated, which may include an agreement between the buyer’s broker and someone other than the buyer, the C.A.R. Standard Forms Committee decided to create a document where the buyer is advised of, and acknowledges, key information related to the buyer broker’s compensation.  Here’s a description of the ABCD’s three sections:

Section 1 has information about where the broker’s compensation can come from.  It is intended to be given to the buyer up front (early in the agency relationship) so the buyer can review it, ask questions to attain a better understanding of how their broker might be paid, and acknowledge receiving this information.

Section 2 has a chart to list various properties that are being shown to the buyer and what the expected compensation is and what the source is.  It also has a place for the buyer to initial at the time that property is shown.

Section 3 is a place for the broker to disclose the final amount of compensation earned in the transaction after close of escrow.  It has a place for the buyer to initial to acknowledge receipt of this information.

In conclusion, though there are alternative ways for a real estate licensee to inform their buyer client about expected compensation and the final amount of compensation (e.g., by providing the buyer with the non-confidential print-out from the MLS showing the compensation amount; by providing the buyer with a copy of the buyer broker’s contract with the listing agent or seller; and/or by providing copies of escrow documents showing the buyer’s agent’s compensation on the buyer’s closing document), using the ABCD may be much simpler and more effective in your practice.

Now, it's my turn to opine.... everyone deserves to get paid for what they do. This just puts it in writing for all to see/know. I'm very satisfied with this. Very much so.

Your Monthly Sales Info For Santa Clarita Valley - April 2024

Good Morning & Happy Friday. Well, Happy Birthday to my Hubby today.💓 Fortunately he's gone fishing alllllll day today so I can actually work & bake him a cake before he gets home!

Today I'm sharing the sales infor for Santa Clarita. Acton to the East, Stevenson Ranch to the West, Castaic to the North, Newhall to the South. All the little areas in between.

As of this moment, we have:

Coming Soon - 13 / Available for Sale - 399 (that's actually 10% higher than last month) / Under Contract - 343 / Closed Escrow in the last 30 Days - 251.

So, yes, if you've been watching, the inventory is creeping up a bit. A couple of stories to share. Well, tid-bits of info from the three of us. Homes that are perfect are still flying off the shelf. Homes that are extremely desirable, for whatever reason, selling quickly. Homes that need a bit of updating are taking longer. And, unfortunately, the only way to light a fire under a prospective buyers butt, on a home that is languishing on the market, is to drop the price. Drop The Price. Yep, that's what you gottat do. Buyers are asking why a property is still on the market after 30 days? What's wrong with it? They are still used to things moving quickly. If it's not, it isn't priced right to bring in the right buyer.

There is a buyer for every home, we all know that. 

Even for this one!

But, no matter how much a buyer likes your home, if it's not priced where they think it's fair, they aren't going to make an offer to buy it. 20+ years of experience with this, trust me. Trust US. We know more than you, by far.

Off my soapbox now....til next blog post! 

Swedish Death Cleaning - April 2024

Anyone that has worked with me on selling a home is used to this phrase "You Gotta Pack It Anyways" when we are doing pre-marketing considerations.

Most people have heard of Marie Kondo and her method of decluttering. But, have any of you heard of “döstädning”? Swedish Death Cleaning? It is a philosophy that encourages reflection and mindfulness about our belongings and the legacy we leave behind.

I've had to sell a home after my moms passing. Fortunately she had already completely done a döstädning when she moved into an assisted living facility a few years earlier.  But, she had actually started years before that!

My siblings and I, as well as our children, are lucky that none of us ... mums included ... would be considered among the people that like 'things'. A lot of things, as some people do. Our family is defintely more along the lines of minimalism. 

But, let's say you are getting up there in years. You know, starting to get those senior citizen discounts? Now's about the time you really need to consider the process of clearing out the things, the clutter, the items that won't be sentimental to your heirs. 

"In a culture that often celebrates accumulation, Swedish Death Cleaning champions minimalism. It’s not about ruthlessly discarding material things but rather about curating a collection of items that truly enrich one’s life."

"Beyond physical belongings, Swedish Death Cleaning also entails organizing important information for your loved ones. This includes not only financial documents and passwords but also personal reflections and wishes." Mike & I really need to do this! "Consider creating a digital or physical legacy box containing these vital details, ensuring that your loved ones have access to them when needed. Reflecting on one’s life and documenting personal stories can also be a therapeutic process, allowing for introspection and closure." My mom left us a journal of her final years. 

And, if you're realizing that maybe this is something you should consider starting now and continuing regularly, here is a Sweedist Death Cleaning checklist for you:

*Start with sentimental items, gradually expanding to include less emotionally charged belongings.

*Curate a collection of items that truly enrich your life and align with your values.

*Organize important documents and information for your loved ones.

*Cultivate habits of minimalism and intentional living.

*Regularly assess your belongings and declutter as needed.

*Consider the happiness and well-being of yourself and others when deciding what to keep.

*Share your belongings with others through donations, gifts, or meaningful gestures.

Margareta Magnusson discusses death cleaning.

If you need some help, to start the döstädning process, we'll be glad to assist.

And, you'll be glad you started now,

 if you're thinking about selling your home anytime in the near future.

Boomers Moving Will Be More Like a Gentle Tide Than a Tsunami

Have you heard the term “Silver Tsunami” getting tossed around recently? If so, here’s what you really need to know. That phrase refers to the idea that a lot of baby boomers are going to move or downsize all at once. And the fear is that a sudden influx of homes for sale would have a big impact on housing. That’s because it would create a whole lot more competition for smaller homes and would throw off the balance of supply and demand, which ultimately would impact home prices.

But here’s the thing. There are a couple of faults in that logic. Let’s break them down and put your mind at ease.

Not All Baby Boomers Plan To Move

For starters, plenty of baby boomers don’t plan on moving at all. A study from the AARP says more than half of adults aged 65 and older want to stay in their homes and not move as they age (see graph below):

While it’s true circumstances may change and some people who don’t plan to move (the red in the chart above) may realize they need to down the road, the vast majority are counting on aging in place.

As for those who stay put, they’ll likely modify their homes as their needs change over time. And when updating their existing home won’t work, some will buy a second home and keep their original one as an investment to fuel generational wealth for their loved ones. As an article from Inman explains:

“Many boomers have no desire to retire fully and take up less space . . . Many will modify their current home, and the wealthiest will opt to have multiple homes.”

Even Those Who Do Move Won’t Do It All at Once

While not all baby boomers are looking to sell their homes and move – the ones who do won’t all do it at the same time. Instead, it’ll happen slowly over many years. As Freddie Mac says:

“We forecast the ‘tsunami’ will be more like a tide, bringing a gradual exit of 9.2 million Boomers by 2035 . . .”

As Mark Fleming, Chief Economist at First American, says:

“Demographics are never a tsunami. The baby boomer generation is almost two decades of births. That means they’re going to take about two decades to work their way through.”

Bottom Line

If you're stressed about a Silver Tsunami shaking the housing market overnight, don't be. Baby boomers will move slowly over a much longer period of time.

The Truth About A Complicated & Infrequent Transaction . . .

So, lord have mercy, there sure has been a lot of 'news' about the N.A.R. (National Association of Realtors) proposed settlement. 

Here, from your 22 year Realtor expert, is the truth about that settlement that is not really being calmly shared in the news.

First and foremost, the settlement is only a proposal. It will, hopefully, be agreed to this Summer. The N.A.R. chose to settle, to avoid 'copycat' future lawsuits. Nor, go into bankruptcy. I'm all for it.

• COMMISSIONS have ALWAYS been negotiable. ALWAYS. If your Realtor stands firm on their fees, you can choose another Realtor. Nuff Said. And, a Realtor can choose not to work for what you want to pay. Been there, done that.
• The MLS, Multiple Listing Service, has always shown the Buyer Agent Compensation in the agent remarks. In the last year or two, that information was made public on many Real Estate sites. Now, it cannot be noted in the MLS, so that won't show up on those sites any longer. However, there will likely be a concessions section in the MLS in the near future, as a lot of buyers will now ask Sellers to pay for their agents' fees.
• Once officially settled, it will also mean, a buyers agent will have to ask for, in writing, what, if any, Seller compensation is being offered for a property their buyer wants to write an offer on.
• Veterans & First Time Buyers will be hit hard. They frequently don't have a lot of cash on hand and are regularly asking for Sellers to pay closing costs. However, currently there are limits. Fannie & Freddie will be talking about increasing those limits as needed. We shall see on that.
• The Real Estate Purchase Agreement will start to see a lot of "Seller to Pay Buyer Agent Compensation of _____". 
• We will start to see the Buyer Broker Agent Agreement used regularly. It is used frequently by many already. More don't use than do though. It will state the buyer agent fiduciary responsibility to client, just like a sellers agent says in their listing agreement. It will also state what the agent's compensation is to be, who is to pay it, etc.
• We may see more Dual-Agency type sales. Which, me personally, I don't care for. How can you take care of two different sides of a transaction fairly at all times. "Same as why lawyers don't represent plaintiff and defendant" I just heard on a video this morning.
• As has happened so many times over the last two decades, many, I mean MANY, weaker agents will leave the business. Good, best to keep the intelligent and strong ones working for you than the fly-by-night, make a quick buck, ones....right?
• Will home prices change because of this? Very doubtful. Home prices are like everything else, Supply & Demand. But, based on the bullet point just above, if we lose crappy agents, will agent commissions go up due to that same Supply & Demand situation? Honestly, very doubtful. But, made me smirk as I typed it!
• Just some additional food for thought. When I first became licensed in 2002 to help people navigate their home sales and purchases, the average commission fees were about 6%. Last time they were over that was in 1991. The average in 2020 .... the COVID years .... was 4.94%. Most of our clients are at 5%, but, as stated above .... that is always negotiable. On Both Sides.

Me, and my 'family' of agents, hope that this post today helps to answer your questions and eliminate your concerns about what you are hearing in the news. This is not a biased, as a Realtor, post. This is the truth.

We will never break the Trust you have placed in us. 

Never.

Santa Clarita Valley Home Sales Activity March 15, 2024

Good Morning and happy Friday to you! Market is a changing! Well, a wee bit at least. Our numbers, in all categories, are up. 👆

You should all know by now that I include Acton to the East, Newhall to the South, Stevenson Ranch to the West, and Castaic to the North. Even though 3 out of 4 of them are not in the incorporated area of SCV, as a local Realtor, we find that when working the official hood, those neighborhoods do get bought and sold by us....a lot!

Here ya go, as of this moment:

Coming Soon - we have 17 (last month was 11)

Active - 362 (last month was 328)

Under contract/in Escrow - 342 (last month was 285)

Sold in the Last 30 Days - 185 (last month was 128)

I posted the info about last month so you wouldn't have to look for it!

Jennifer closed one of ours last week for a very special friend of mine. She has another closing this coming week, for a really good (and taco loving) pal. Leslie just put a new one on the market, and it's a beauty! It's for a family I've known 20+ years that are working towards their real estate goal of generational living! 

It's soooooo pretty!

As always, whatever your needs, be it selling, buying, or just consulting, our 'family' of 3 are here to help! Have a wonderful weekend.

Why An Agent is Your Best Friend When Buying or Selling a Home

No matter how you slice it, buying or selling a home is a big decision. And when you’re going through any change in your life and you need some guidance, what do you do? You get advice from people who know what they’re talking about.

Moving is no exception. You need insights from the pros to help you feel confident in your decision. Freddie Mac explains it like this:

“As you set out to find the right home for your family, be sure to select experienced, trusted professionals who will help you make informed decisions and avoid pitfalls.”

And while perfect advice isn’t possible – not even from the experts, what you can get is the very best advice out there.

The Power of Expert Advice

For example, let’s say you need an attorney. You start off by finding an expert in the type of law required for your case. Once you do, they won’t immediately tell you how the case is going to end, or how the judge or jury will rule. But what a good attorney can do is walk you through the most effective strategies based on their experience and help you put a plan together. They’ll even use their knowledge to adjust that plan as new information becomes available.

The job of a real estate agent is similar. Just like you can’t find a lawyer to give you perfect advice, you won’t find a real estate professional who can either. That’s because it’s impossible to know everything that’s going to happen throughout your transaction. Their role is to give you the best advice they can.

To do that, an agent will draw on their experience, industry knowledge, and market data. They know the latest trends, the ins and outs of the homebuying and selling processes, and what’s worked for other people in the same situation as you.

With that expertise, a real estate advisor can anticipate what could happen next and work with you to put together a solid plan. Then, they’ll guide you through the process, helping you make decisions along the way. That’s the very definition of getting the best – not perfect – advice. And that’s the power of working with a real estate advisor.

Bottom Line

If you’re looking to buy or sell a home, you want an expert on your side to help you each step of the way. Connect with a real estate professional so you have advice you can count on. Connect with us!

Jennifer, Lauren, & Leslie

(661) 313-5470 😊