Category Archives: Learning Center

New MLS Rules Explained: Insights from Greg Zanger on WGEM News

Recent changes stemming from lawsuits involving MLS providers and the National Association of Realtors (NAR) have introduced significant reforms in the real estate industry. These changes are designed to promote transparency and competition, benefiting both buyers and agents.

Key Changes in MLS Rules:

  • Removal of Compensation Offers from Listings: Effective August 2024, MLSs will no longer display the broker’s offer of compensation to buyer’s agents. This change ensures that buyers are aware that agents are not working for free and encourages negotiation for services.
  • Mandatory Written Agreements: Agents now need to establish written agreements with buyers before showing properties. This agreement clearly outlines agent services and compensation, promoting transparency.
  • Negotiable Commissions: It is now a requirement to inform clients that commission rates are negotiable and not fixed.

These reforms empower buyers to better understand and negotiate their representation and associated costs.

Economics of Buying a Home

Why the Current Broker Fee Model Matters

The current way brokerage services are paid helps reduce the financial burden on buyers, especially for first-time and low-income home buyers.

Key Insights on Real Estate Broker Fees

Prevents a Greater Cost Burden

The current model keeps costs lower for buyers by preventing additional out-of-pocket expenses that would otherwise make buying a home even more costly.

Supports First-Time and Low-Income Buyers

For first-time and low-income buyers, an additional direct payment to brokers would add thousands to an already expensive transaction, creating more financial hurdles.

Limited Savings Impact

The typical American household has about $5,300 in savings—only a fraction of the median $16,100 down payment needed for a starter home. Keeping broker fees within the transaction reduces the need for higher savings.

Increases Home Accessibility

Since most lenders don’t allow broker fees to be financed, every 1% in out-of-pocket broker commissions would put a home $2,300 further out of reach for first-time buyers.

Local MLS Broker Marketplaces in Action

Multiple Listing Services (MLSs) are independent broker marketplaces that connect buyers and sellers of real estate in the U.S. through their respective agents. Local MLS broker marketplaces give first-time, low-income and other buyers better access to the American dream of homeownership while also exposing a seller's property to the greatest number of potential buyers.

What Local MLS Marketplaces
Do For You:

A World
Without Local MLS Marketplaces:

Largest Databases of Available Homes

Local MLS broker marketplaces host the largest databases of available properties, ensuring you have access to a comprehensive list of options.

No Centralized Source of Available Homes

Without MLS marketplaces, finding homes would be decentralized and inefficient, making it difficult for buyers to locate properties.

Up-to-Date Home Status Information

They provide the most current status information on homes, giving buyers confidence in the availability and accuracy of listings.

Outdated Home Status Information

Lack of MLS resources would lead to outdated listings, complicating the process and wasting buyers’ time on unavailable properties.

Maximized Visibility of Homes for Sale

MLS marketplaces ensure maximum exposure for homes on the market, attracting a wide pool of potential buyers.

Fewer Choices for Buyers

The absence of a centralized database means fewer homes available on real estate sites, reducing buyer options.

Verified, Trusted, Detailed Property Information

Listings are verified, trusted, and detailed, so you can rely on the accuracy of the property information provided.

Unverified and Inaccurate Property Information

Without MLS verification, property information could be unreliable, leading to misinformation and potential buyer risk.

Facilitate Cooperation Between Buyer and Seller Brokers

MLSs foster collaboration between buyer and seller brokers, making transactions smoother and more transparent.

Added Listing Fees for Buyers and Sellers

Without MLS access, buyers and sellers might need to pay to list or find properties on individual sites.

Equal Opportunity for All Buyers and Sellers

They support equal access, creating a fairer marketplace where all buyers and sellers have the same opportunities.

Reduced Options for Buyers Without Broker Access

MLSs provide access to buyers who may not have close broker resources, broadening opportunities for more demographics.

 

Easy to Find the Agent Selling the Home

MLS listings make it easy to locate and connect with the listing agent, facilitating the buying process.

Inconsistent Broker Information Across Listings

Without MLS, broker information would vary, making it difficult for buyers to trust listings and complete smooth transactions.

Level Playing Field Between Large and Small Brokerages

By promoting equality among brokerages, MLS marketplaces ensure both large and small firms can compete effectively.

Broker-Controlled Markets

The lack of MLS would lead to broker-controlled listings, limiting transparency and fair access in real estate.

Buying a Home is Easy!*

If You Work with a Real Estate Agent Who is a REALTOR®

Some people think buying a home is as simple as:

  • Looking at houses online
  • Finding something affordable
  • Signing some papers

But there’s so much more to it when you work with a REALTOR®.

What REALTORS® Do to Help You Buy Your Home:

  1. Getting Started:
    • Educate clients on the home-buying process and coordinate a custom plan.
    • Review the buyer representation agreement and discuss compensation.
    • Understand your budget and financial needs, helping to set realistic goals.
    • Search MLS listings to find the best matches based on your preferences.
  2. Finding Your Home:
    • Research properties to align with your interests and needs.
    • Prepare you to make the most attractive offer for current market conditions.
    • Coordinate home inspections, lender consultations, and necessary assessments.
  3. Achieving Home Ownership:
    • Navigate state and federal paperwork with ease.
    • Research mortgage rates and connect you with reputable lenders.
    • Guide important contract deadlines and pre-closing property walkthroughs.
    • Advocate for you throughout the process, ensuring all terms are met by closing.
  4. Finalizing the Deal:
    • Develop competitive offers and negotiate the best price and terms.
    • Represent your best interests, advising you during negotiations.
    • Coordinate multiple schedules and parties to save you time and stress.
    • Ensure everything is complete in advance so closing day is a celebration.

 

Selling a Home is Easy!*

If You Work with a Real Estate Agent Who is a REALTOR®

Some people think selling a home is as simple as:

  • Putting a sign in your yard
  • Letting other real estate agents know
  • Patiently waiting

But there’s so much more to it when you work with a REALTOR®.

What REALTORS® Do to Help You Sell Your Home:

  1. Market Assessment:
    • Research local sales activity for the past 18 months.
    • Assess curb appeal and other market-preparation elements like odors, clutter, and cleanliness.
  2. Listing Services:
    • Create a detailed list of property amenities.
    • Develop and execute a custom marketing plan.
    • Coordinate showings and ensure prompt updates on local databases.
  3. Pricing Strategy:
    • Create a plan based on current market conditions.
    • Promptly enter any price changes and compare offers.
  4. Transaction Management:
    • Coordinate the closing process with the buyer’s agent, lender, and closing company.
    • Protect trust/earnest money and ensure smooth handling of utilities, final walkthroughs, and repairs.
    • Provide guidance through contract technicalities.
  5. Closing the Sale:
    • Negotiate offers with a professional approach.
    • Ensure the transaction flows smoothly to prevent unexpected complications.

The Essential Real Estate Agent

Your Advocate

Expert real estate agents save home buyers time and help take stress out of the process. In fact, 90% of home buyers say they would engage their real estate agent again or recommend them to others.

Navigating the Buying Process

Real estate agents wear many hats ...

Community

  • Know local, county and stateproperty taxes
  • Decipher public property information
  • Advise on price trends, schools and neighborhoods

Financial

  • Coordinate with lenders
  • Research mortgage rates and terms
  • Schedule appraisals and inspections

Legal

  • Manage attorney reviews
  • Navigate all required state and federal forms
  • Handle closing documents

An Expert Resource

91%

of home buyers consider their real estate agent to be a useful source of information.

85%

of first-time home buyers say their real estate agent helped them understand the home buying process.

Real Estate Agent To-Do List

Educate clients about transaction process

Search broadest database of available homes

Research information about properties

Arrange tours of homes

Navigate home inspections

Negotiate best possible price

3 Ways to Maximize the Value of Your Real Estate Agent

1. Let Them Handle the Hard Work

Real estate agents simplify your home search by showing and researching every property that meets your needs. With access to the largest home database (via the MLS, Realtor.com, Zillow, and Trulia), they offer insights into community details like property taxes, school districts, and neighborhood dynamics.

2. Leverage Their Expertise in the Buying Process

  • Knowledge: 98% of buyers are satisfied with their agent’s market knowledge.
  • Guidance for First-Time Buyers: 82% of first-time buyers say agents help them navigate the home-buying process.
  • Legal & Financial Help: Agents coordinate with lenders, research mortgage rates, and assist with state and federal paperwork.

3. Choose a Service Model That Fits Your Needs

Agents offer flexible service options:

  • Full-Service Model: Negotiable commission.
  • Flat Fee Model: Set price per service.
  • Reduced/Discounted Fee Models: Customizable pricing and services.

Additional Facts:

  • 90% of buyers would recommend their agent.
  • 88% of Americans searching for properties online use a real estate agent.

179 Ways Agents Who Are REALTORS® Are Worth Every Penny of Their Compensation

Here's a look at all the things — big and small — that an agent who is a REALTOR® may do to help clients when buying and selling a home.

You know you earn every penny you get when you sell a home. This list can help you show your customers exactly what you do to help them buy or sell their home.

Download the PDF: 179 Ways Agents Who Are REALTORS® Are Worth Every Penny

Get this document in Spanish.

NEW: 105 More Ways Agents Who Are REALTORS® Are Worth Every Penny of Their Compensation

Pre-Listing Activities:

  1. Make an appointment with the seller for a listing presentation.
  2. Send the seller a written or email confirmation of the listing appointment and call to confirm.
  3. Review pre-appointment questions.
  4. Research all comparable currently listed properties.
  5. Research sales activity from Local MLS Broker Marketplaces and public records databases.
  6. Research Average Days on Market for property of this type, price range, and location.
  7. Download and review property tax roll/assessor information.
  8. Prepare preliminary Comparable Market Analysis (CMA) to establish fair market value.
  9. Obtain a copy of the subdivision plat or complex layout.
  10. Research property’s ownership and deed type.
  11. Research property’s public record information for lot size and dimensions.
  12. Research and verify legal description.
  13. Research property’s land use coding and deed restrictions.
  14. Research property’s current use and zoning.
  15. Verify the legal names of the owner(s) in the county’s public property records.
  16. Prepare listing presentation package with above materials.
  17. Perform an exterior Curb Appeal Assessment of the subject property.
  18. Compile a formal file on the property.
  19. Confirm current public schools and explain the impact of schools on market value.
  20. Review the listing appointment checklist to ensure all steps and actions are completed.
  21. Review the Obsolete Property Rehabilitation Act (OPRA) report from the township for all permitted records.
  22. Add client into your database.

Listing Appointment Presentation:

  1. Give seller an overview of current market conditions and projections.
  2. Tour property.
  3. Review agent’s and company’s credentials and accomplishments in the market.
  4. Present company’s profile and position or niche in the marketplace.
  5. Present preliminary CMA to seller, including comparable properties, sold properties, current listings, and expired listings.
  6. Offer pricing strategy with updates to CMA based on tour of home and updates, upgrades, professional judgment, and current market conditions.
  7. Discuss goals with seller to market effectively.
  8. Explain market power and benefits of Local MLS Broker Marketplaces.
  9. Explain market power of web marketing, IDX, and REALTOR.com.
  10. Explain the work you do behind the scenes and your availability on weekends.
  11. Explain role in screening for qualified buyers and protect seller from curiosity seekers.
  12. Present and discuss strategic master marketing plan.
  13. Explain transaction/agency brokerage relationship.
  14. Review and explain all clauses in listing contract and addendum, then obtain seller’s signature once property is under listing agreement.
  15. Review current title information.
  16. Gather square footage/measure overall and heated square footage as required.
  17. Measure interior room sizes.
  18. Confirm lot size via owner’s copy of certified survey, if available.
  19. Note all unrecorded property liens, agreements, easements.
  20. Obtain house plans, if applicable and available.
  21. Review house plans and make a copy.
  22. Prepare showing instructions for buyers’ agents and showing times with seller.
  23. Discuss possible buyer financing alternatives and options with seller.
  24. Review current appraisal if available.
  25. Identify Homeowner Association manager if applicable.
  26. Verify Homeowner Association Fees with manager—mandatory or optional, plus fees.
  27. Order copy of Homeowner Association bylaws, if applicable.
  28. Research electricity availability, supplier’s name, and phone number.
  29. Have utility companies provide average utility usage from last 12 months of bills.
  30. Research and verify city sewer/septic tank system.
  31. Calculate average water fees or rates from last 12 months of bills.
  32. Confirm well status, depth, and output from Well Report.
  33. Research/verify natural gas availability, supplier’s name, and phone number.
  34. Verify security system, current terms of service, and whether owned or leased.
  35. Verify if seller has transferable Termite Bond.
  36. Ascertain need for lead-based paint disclosure.
  37. Prepare detailed list of property amenities and assess market impact.
  38. Prepare detailed list of property’s inclusions and conveyances with sale.
  39. Compile list of completed repairs and maintenance items.
  40. Send vacancy checklist to seller if property is vacant and register the property with the township if it is vacant or a rental home.
  41. Explain benefits of Homeowner Warranty to seller.
  42. Assist sellers with completion and submission of Homeowner Warranty Application.
  43. Place Homeowner Warranty in property file for conveyance at time of sale.
  44. Have extra key made for lockbox and one for your file.
  45. Verify if property has rental units involved.
  46. If the property has rental units, make copies of all leases for retention in listing file.
  47. Verify all rents and deposits.
  48. Inform tenants of listing and discuss how showings will be handled.
  49. Arrange for installation of yard sign.
  50. Complete new listing checklist.
  51. Review curb appeal assessment and provide suggestions to improve saleability.
  52. Review interior décor assessment and suggest changes to shorten time on market.
  53. Load listing into transaction management software program.
  54. Prepare Local MLS Broker Marketplaces Profile Sheet.
  55. Enter property data from Profile Sheet into Local MLS Broker Marketplaces Database.
  56. Proofread Local MLS Broker Marketplaces database listing for accuracy—including proper placement in map.
  57. Add property to company’s active listings list.
  58. Provide seller copies of the listing agreement and Local MLS Broker Marketplaces Profile Sheet within 48 hours or within the time period of Local MLS Broker Marketplace guidelines.
  59. Take additional photos for upload into Local MLS Broker Marketplaces and use in fliers.
  60. Create print and internet ads with seller’s input.
  61. Coordinate showings with owners, tenants, and other agents.
  62. Return all calls.
  63. Install electronic lock box if authorized. Program agreed-to showing times.
  64. Prepare mailing and contact list.
  65. Generate mail-merge letters to contact list.
  66. Order Just Listed labels and reports.
  67. Prepare fliers and feedback reports.
  68. Review comparable Local MLS Broker Marketplaces regularly to ensure property remains competitive.
  69. Prepare property marketing brochure for seller’s review.
  70. Arrange for printing or copying of marketing brochures or fliers.
  71. Place marketing brochures in all company agent mailboxes.
  72. Upload listing to company and agent Internet site, if applicable.
  73. Mail out Just Listed notice to all neighborhood residents.
  74. Advise network referral program of listing.
  75. Provide marketing data to buyers through international relocation network buyers.
  76. Provide marketing data to buyers coming from referral network.
  77. Provide Special Feature cards for marketing, if applicable.
  78. Submit ads to company’s participating internet real estate sites.
  79. Price changes conveyed promptly to all internet groups.
  80. Reprint/supply brochures promptly as needed.
  81. Feedback e-mails sent to buyers’ agents after showings.
  82. Review weekly market study.
  83. Discuss with sellers any feedback from showings to determine if changes are needed.
  84. Set up marketing reports on showing-time application and company website.
  85. Place regular weekly update calls to seller to discuss marketing and pricing.
  86. Promptly enter price changes in the Local MLS Broker Marketplaces database.

Offers:

  1. Receive and review all Offer to Purchase contracts submitted by buyers’ agents.
  2. Evaluate offer(s) and prepare a net sheet for the owner for comparison purposes.
  3. Explain merits and weaknesses of each offer to sellers.
  4. Contact buyers’ agents to review buyer’s qualifications and discuss offer.
  5. Deliver Seller’s Disclosure to buyer upon request and prior to offer if possible. Upload to the Local MLS Broker Marketplaces additional documents at time of listing.
  6. Confirm buyer is pre-qualified by calling loan officer.
  7. Obtain buyers’ pre-qualification letter from loan officer if not submitted with offer.
  8. Negotiate all offers per seller’s direction on seller’s behalf, set time limit for loan approval and closing.
  9. Prepare and convey counteroffers, acceptance, or amendments to buyer’s agent.
  10. Create excel spreadsheets for easy review on multiple bids.
  11. Email or send copies of contract and all addendum’s to the closing attorney or title company.
  12. When Offer to Purchase contract is accepted, deliver to buyer’s agent.

Contracts:

  1. Record and promptly deposit buyer’s earnest money in escrow account.
  2. Disseminate under-contract showing restrictions as seller requests.
  3. Deliver copies of fully signed Offer to Purchase contract to seller.
  4. Deliver copies of Offer to Purchase contract to lender.
  5. Provide copies of signed Offer to Purchase contract for office file.
  6. Advise seller of additional offers submitted between contract and closing.
  7. Change status in Local MLS Broker Marketplaces to Sale Pending.
  8. Update transaction management program to show Sale Pending.
  9. Provide credit report information to seller if property will be seller-financed.
  10. Assist buyer with obtaining financing, if applicable, and follow-up as necessary.
  11. Coordinate with lender on discount points being locked in with dates.

Inspections:

  1. Deliver unrecorded property information to buyer.
  2. Order septic system inspection, if applicable.
  3. Receive and review septic system report, and assess any possible impact on sale.
  4. Deliver copy of septic system inspection report lender and buyer.
  5. Deliver Well Flow Test Report copies to lender and buyer, and property listing file.
  6. Verify termite inspection ordered.
  7. Verify mold inspection ordered, if required.
  8. Confirm verifications of deposit and buyer’s employment have been returned.
  9. Follow loan processing through to the underwriter.
  10. Add lender and other vendors to your management program so agents, buyer, and seller can track progress of sale.
  11. Contact lender weekly to ensure processing is on track.
  12. Relay final approval of buyer’s loan application to seller.

Home Inspections:

  1. Coordinate with seller for buyer’s professional home inspection.
  2. Review home inspector’s report.
  3. Enter completion into transaction management tracking program.
  4. Explain seller’s responsibilities, and recommend an attorney interpret any clauses in the contract.
  5. Ensure seller’s compliance with Home Inspection Clause requirements.
  6. Assist seller with identifying contractors to perform any required repairs.
  7. Negotiate payment, and oversee all required repairs on seller’s behalf, if needed.

The Appraisal:

  1. Schedule appraisal.
  2. Provide to appraiser any comparable sales used in market pricing.
  3. Follow-up on appraisal.

Processing for Closing:

  1. Enter completion into transaction management program.
  2. Assist seller in questioning appraisal report if it seems too low.
  3. Get contract signed by all parties.
  4. Coordinate closing process with buyer’s agent and lender.
  5. Update closing forms and files.
  6. Ensure all parties have all forms and information needed to close the sale.
  7. Select location where closing will be held.
  8. Confirm closing date and time, and notify all parties.
  9. Assist in solving any title problems or in obtaining death certificates.
  10. Work with buyer’s agent in scheduling buyer’s final walk-thru prior to closing.
  11. Double-check all tax, homeowners’ association dues, utility, and applicable prorations.
  12. Request final closing figures from closing agent (attorney or title company).
  13. Receive and carefully review closing figures to ensure accuracy of preparation.
  14. Confirm buyer and buyer’s agent have received title insurance commitment.
  15. Provide homeowners warranty for availability at closing.
  16. Forward closing documents to absentee seller as requested.
  17. Review documents with closing agent (attorney).
  18. Coordinate closing with seller’s next purchase, and resolve any timing problems.
  19. Ensure a smooth closing so seller receives a net-proceeds check at closing.
  20. Refer sellers to a quality agent at their destination, if applicable.
  21. Change Local MLS Broker Marketplaces status to Sold. Enter sale date, price, selling broker, etc.

Follow-Up After Closing:

  1. Share the warranty paperwork for claims in the future.
  2. Attempt to clarify and resolve any conflicts about repairs if buyer is not satisfied.
  3. Respond to any calls and provide any information required from office files.
  4. If a rental, verify all deposits and prorated rents are reflected accurately on the closing statement.
  5. Close out listing in your management program.