Hello everyone
This is Charles McShan with Century 21 Universal. I have a question for you. What is a Fiduciary? I will answer that question shortly because it is vital to this post. I had a glitch in my system that prevented me from posting part three of this post for the last week or so. But everything is working now, and here is the concluding part of the Courtroom verdict against the National Association of Realtors (NAR). Parts one and ? of this post dealt with the courtroom verdict, the new rules and documentation that will go into effect, and how home sellers are no longer obligated to pay the home buyer’s fee. We answered questions about this new way of doing things after August 17th, 2024. Some say that being a real estate home-buying agent will become a thing of the past. Some people say out loud that they can do it themselves and deal with the listing agent.
It is your right to do so for those who think of those terms. Look at the above photo. Realtors come in all shapes, sizes, colors, and age brackets. Some Realtors have left the business while new Realtors are coming. We are young and old. We realtors are young and not so young. What’s the point? We love what we do, and pardon my English, “We ain’t going nowhere.” This concluding part will highlight the skills a real estate buying agent brings to the table. Also, we will learn about the word Fiduciary and how it affects all real estate transactions.
Article Guide
News Flash!
A: All local MLS companies will make changes to comply with these rulings while complying with local laws. Even though these laws will take effect on August 17th, 2024, many homesellers refuse to compensate the buying side agent today.
B: It was reported that one buyer’s agent and their company suffered a financial loss. That buyer’s agent did not have their client sign the exclusive representation agreement. The agent misread the co-op agreement because the home seller refused compensation. The deal was closed. The listing agent and their company got paid, but the buying agent and company were not. Ouch! That loss went into the thousands of dollars for the buying office. Did the client feel sorry for their past agent and not offer them any money for their service? No! Not one penny. How do you think that agent feels? How does his family feel? How do you think we felt when we heard that story? We all said that will not happen to us. That was a wake-up call. This is the new environment we are living in. Agents and brokers have to look out for their livelihood. We, too, must pay bills
C: To comply with the courtroom verdict, local associations are coming out with an updated Buyer Agreement document. Each regional association and Chicago Association of Realtors (CAR) will have its version. So, the document I posted in part 2 of this blog post is still valid. When CAR releases the newer version, I will post it. If you live outside of the Chicago area, you will have to sign the one within your local jurisdiction
D: On May 22nd. 2024 The Department of Veteran Affairs announced it would temporarily lift its ban on buyers directly paying for professional real estate representation. This is a sensitive topic, and I do not want to misquote anything, so if you would like to read the official version published on the National Association of Realtors official website, please click the link. This will be good news for the men and women who served in the military. click here
Will Home Buyer’s Agents become a thing of the past?
Some people say yes. Please get rid of them! We are in the internet age. I can go online, find all the details of homes for sale on the market, hire a lawyer, and negotiate directly with the listing agent. No problem, right? The age of real estate booms is a thing of the past. The coronavirus pandemic has changed the world in so many ways. We are in a new era. A lot of agents have not renewed their licenses and left the business. That is their choice. That is also their opinion for those who no longer need a buyer agent. Well, you are entitled to your opinion. Most real estate agents/ brokers who remain will continue to put up a good fight. Realtors/Brokers wear many hats. We represent buyers and sellers; we help renters find apartments for their families, so we have much to offer.
Realtors have been servicing Amecia for over 100 years and will continue doing so way into the future. Commercial realtors have not provided compensation for the buying side agent’s side for quite a while, so we on the residential side must imitate them if the home seller refuses to pay us. We have to work even harder to get our compensation from our clients, the homebuyers. We must show them our value because some in the public view us as a dime a dozen ready to be misused. But every day throughout this country, home buyers close on their homes with the help of real estate buying agents. So, let’s talk about the value of using a real estate agent to help you purchase your home now more than ever.
What do I bring to the table as a Real Estate Agent?
Well, we agents bring our knowledge, continuous training, and marketable skills to the table for our clients. We must first do as I am doing now. We must let everyone in our sphere of influence know about the recent courtroom verdict. I must prepare them so that when they are ready to search for the homes of their dreams, they will be prepared to make that move as an informed client. They will know that they need to be preapproved by a loan specialist. If they have not done so, I will set up an appointment with our in-house lenders ASAP. If they are cash buyers, they will have their bank statements and all the necessary documents ready. Gone are the days when you could lowball a home seller. Homesellers are receiving many offers, and if you snooze, you lose. And in today’s market, if you snooze and lose that home you could afford today, it will be gone tomorrow because home prices keep increasing.
The job of a real estate agent is to help the home buyer navigate that road of home ownership from the start of the process to the fish line. Personally, what do I bring to the table to help my clients? Step one is communication, and step two is visualization. I have done that extensively in this 3 part blog post. I talked about a subject and then visually backed it up with charts so you could see what I just said. As they say, a picture is worth a thousand words. This blog post site of charlesmcshan.com is a visual guideway into the real estate market. You will find past articles that benefit home sellers and buyers. Last year, I released a post about what real estate agents do for their clients. If you wish to read that post, click here.
I am not trying to overwhelm you, but I posted this email last winter on the 179 things realtors representing home buyers and sellers do for their clients. Plus, there are 105 additional things we do if you are interested. click here
As you can see, being a licensed realtor involves training, which costs money. You can also acquire advanced training for various certifications, titles, and destinations. You can also join multiple groups and organizations. What’s that? You have a question for me.
Mr. McShan, What sort of special training have you acquired?
All real estate agents/brokers are constantly being trained. The level at which you train is always your choice. I have acquired four certified designations; they are as follows.
1: Short Sales and Forclosures(SFR) for short.
2: Certified Distressed Property Expert (CDPE) for short.
Both certifications qualify me to help people navigate the short sale process. Selling a property short allows clients to get on with their lives and avoid a significant hit on their credit records. If a short sale is not successful, the next step is the foreclosure process. If you work a job requiring high-security clearance, you could lose your job if you have a foreclosure on your credit record. More on these two certifications will be provided on another day.
Here are my credentials that benefit home buyers.
3: I am a NAR Accredited Buyer’s Representative (ABR) for short.
4: I am also an Accredited Power Agent Specialists.
So, What exactly is an ABR Specialist?
Good question. This unique training designation by the National Association of Realtors allows me to specialize in helping home buyers. What does that training entail? I could personally answer that question, but NAR has created a 15-question-and-answer format that will satisfy any serious home buyer to sign the exclusive home-buying agreement. Please click here
Ok! So, What is an Accredited Power Agent?
As an Accredited Power Agent, I work under a well-known real estate trainer named Daryl Davis. His company has trained me intensely. The Power Agent company and the Power Agent logo are copywritten. Much of the charts and graphics in this 3-part blog post came from his organization. The written legal language within these posts can be tedious, but the charts and graphics are self-explanatory. When you combine my ABR certification with the training below, you can see the value I bring to the table. This section will benefit you more if you use two electronic devices simultaneously. Keep the first device in this blog post section and log into this blog post again with the second device in the same section. With the second device, click the link below and see the charts provided. With the first device, read the paragraphs below, and as you read, look at the charts, look at the charts on the other device, and you visually understand what I am talking about. Did you get the second device turned on? Good. Are you ready? Then let’s do it. Please click the link. click here.
A: The first chart discusses what a Power Agent is, its Advantages, and my commitment. The following chart is my Certificate of Membership, followed by a chart discussing the home buying chart; in a nutshell, it condenses the home buying process. The following chart expands and illustrates the homebuying process. You must visualize this process to understand it. This chart resembles the popular Monopoly board game. If you are older or maybe not so old, you and your family have probably played that game many times. If not, google the word “Monopoly board.” My version of the board is called “Buyopoly.”
Like a monopoly board, The starting point is at the top left, where it says “Go.” Each clockwise step on the board requires some action by the home buyer and their buying agent working together. Working together will get the home buyer around the board through every hurdle and roadblock, and if everything is successful, we will arrive back at the top left at the finish line, the closing table. Whew! That was a lot of work. When we finish, the home buyer will be given the keys to their new home. Carefully review this board. Look at every step. Each step will require many phone calls, faxes, emails, and whatever it takes legally to get the job done. Wire scams are everywhere. Sometimes, you have to do things the old-fashioned way. Hand-deliver the earnest money to the listing agent’s office. That extra step will protect your client’s hard-earned money. The Buyopoly board represents all the steps to achieving home ownership.
B: In the charts following that buyopoly, you will learn the difference between a customer and a client. There is that Fiduciary word again. It would be best to know the difference between those two words. You can only do so much for a customer but much more for a client. The following chart details the 40 things I do as your exclusive buyer’s agent. The following chart, “As a Seller’s Agent, Here is what I can not or may not do for you as the buyer,” If you still think a listing agent will have your back along with the home seller’s back at the same time, please read the seven bullet points in this chart. Think it through. As a home buyer, can you contact the listing agent of a home you want to buy and seriously think the listing agent will tell you detailed and personal information about the home they are getting paid to sell? If they say the wrong thing, will you not simply walk away from that property? Can that listing agent honestly and openly reveal sensitive information about that home? No! Why?
As fiduciaries, we are responsible for our home sellers’ interests first and foremost. We could never tell the homebuyer any of our home seller’s personal information on the sale of their homes. Our code of ethics prevents us from revealing us from revealing this personal information for the rest of our lives. The same Fiduciary Rules also apply to the buyer’s agent. We cannot reveal sensitive or personal information about our clients to the listing agent. You see, it goes both ways. So, as I said in parts one and two of this post, it will not be in your best interest to cooperate directly with the listing agent. Besides, the home seller’s attorney will ensure no confidential information is revealed throughout the transaction.
The concluding chart discusses Seller Concessions and what they can cover for the various types of mortgage loans on the market. There it is. Be realistic. There may be a few homebuyers qualified to purchase a home on their own, and if you are one of them, do it. But for most home buyers, do they have the time to do all the above steps and simultaneously punch a 9 to 5-time clock or work in the fast-paced corporate world? Bottom line! Can you trust a listing agent to have your back? The answer to that question is no.
These two ABR and Power Agent certifications bring value to the homebuyers I represent
Summary of the Court Room verdict.
What did we, the general public, learn from this 3 part blog post?
!: Contrary to the courtroom verdict, There was never a fixed 6% commission imposed on the housing market by NAR local MLS or Corporate or Independently owned real estate franchises. Today, I talked to 2 people who think that the U.S. government, through this verdict, has ended the 6% commission rate. I tried to explain it to them, but they would not believe what I told them. They said they had agents in the past say that the 6% rate was fixed, and if they did say that, I advised them that those agents were guilty of price fixing and violating anti-trust laws. The 6% rate was always the starting point for any negotiations. Sometimes, you got 6%; other times, it could be 5% or 5.5%, and if you were good with your listing presentation and were a top agent, you could command 6,7, or 8%. So again, 6% is the starting point, and the commission rate is always negotiable.
2: Real estate commission fees have always been negotiated with each home seller and buyer individually
3: The results of this verdict will not bring home prices downward.
4; As a result of this verdict, all MLS services, member boards, and others must remove all requirements of Co-op compensation agreements from all of their documents, effective August 17th, 2024. Offers of compensation can be mentioned elsewhere but not on the MLS. As of this writing, they are working on ways to place the new term compensation somewhere on a form or document. This is a work in progress
5: This verdict also prevents homebuying agents from telling their clients that their fees or commissions are free or part of the contract. A lot of us used to say that in the past. No more. We can never repeat those words. From now on, how much the buying agent gets paid in compensation must be documented.
6: All home buyers must sign an Exclusive Buyer-Broker Representation Agreement. There will be no exceptions to this rule. In states where this rule has been in effect, agents have been fined over $20.000 or have had their real estate licenses revoked for life. The state of Illinois is working on the penalties for any agent violating this new rule.
7: The ruling was to take place in mid-July, but according to Nar, they pushed the date to August 17th, 2024, to reflect the plaintiff’s class action notice. Through the preliminary settlement approval process, the earliest date of the class notice is August 17th, 2024. This comes straight from Nar’s Chief Legal Officer, Katie Johnson. So, pending any extensions, August 17th. 2024 will be the official start date, but as of right now, many changes are in effect, as mentioned above in the news flash.
8:The lawyers representing the homesellers won millions for their law firm. Did those homesellers and lawyers in this class action lawsuit get paid millions of dollars in the settlement? I doubt it. Maybe they collected $600.00 a piece or less.
Last Question. Will Real Estate Buying Agents Become A Thing Of the Past?
A: This blog post covered the verdict from the legal perspective. On the other hand, this series of posts also covered the real estate industry. These are challenging times for our industry. The low inventory of homes on the market affects buyers and sellers nationwide. High interest rates prevent home sellers from selling and moving elsewhere. In addition, home prices continue to soar upwards, affecting homebuyers’ purchasing power. Those are the challenges in the year 2024. Are realtors up to these challenges? Yes, we are. Real Estate Professionals will continue bringing home sellers and buyers together. In Amercia, we do more for our clients than they do in Australia, Great Britain, Germany, or anywhere else in the world combined. Other companies are trying to make inroads into our industry through price-cutting and discount brokerages.
B: Yes, we realtors wear many hats. One day, we represent a home buyer; we also help clients rent apartments, and yes, we also represent homesellers. I would be lying to you if I did not say the name of the game in our industry is to acquire home listings. When you have a listing, like a magnet, it will attract home buyers. And yes, those home buyers now more than in 2024 will need a home buying agent.
Why Will Buying Agents still be relevant for years to come?
Let’s look at some once well-known companies that did not pivot and adapt to the times when confronted with the new kids on the block with new ways of doing business. Those past companies were Sears Robuck and Company, K-mart, Venture, Zayres, Circuit City, and others. Maybe they would still be here when the new kids on the block, namely Wal-Mart, Costco, Amazon, and others, took them on. They did not pivot and adapt like dinosaurs; they disappeared. Sometimes, when new companies appear in science, the older version of doing things cannot pivot, and they get swept over. That is what happened to the taxi and limousine industry and the rental car market. Uber and Lyft almost brought all those three industries to their knees. In time, the limo market and the rental car industry rebounded. On the other hand, the taxi industry lost most of its customers to the ride-share industry, and if the ride-sharing sector does not collapse, those riders will remain with Uber and Lyft. What is the point?
Our real estate industry could have collapsed because of this lawsuit. I wish I were a fly on the wall in the NAR legal boardroom when they were discussing how to settle this lawsuit. Maybe they thought a lengthy appeal process would damage our industry more in the long term. Perhaps they envision that many real estate companies, franchises, and other entities would have filed for bankruptcy or collapsed as Sears did. One thing is for sure: by settling now, all real estate agents, along with the broker’s franchises and the majority of companies, have been released from liability. We can now breathe easier, adapt to the new way of doing things, and continue working as highly-trained professionals. So yes, buying agents will continue to be relevant for decades.
Hold on—one last question. You just said that your Realtors are Highly Trained Professionals. I thought that you were just Salespeople.
Many believe that we are just glorified salespeople, but we are not. Salespeople are just that, salespeople. They sell things, be it clothing, cars, furniture, or computers. They sell these products without being attached to them. If the product malfunctions, you must go through the warranty agreement if it has a warranty. Realtors are highly trained from the beginning of their careers and must constantly update their training every two years. We are trained continuously within our local offices and franchises yearly. We do not work an hourly wage.
We are independent contractors working under a managing broker. We represent the managing broker in all real estate transactions within the broker’s office. The word Fiduciary is always front and center in every deal we transact. By now, you might be sick and tired of seeing that word. I highlight it in Bold Black to catch your attention and for memory retention. If you want to know the meaning of the word Fiduciary, then look at the next group of charts, and you will understand why that word benefits and protects you and your interests. click here
Another word for Fiduciary is attachment or curator. This last group of charts illustrates that Realtors are attached to our clients like doctors, lawyers, and accountants. It is against the law to impersonate a police officer, a doctor, a lawyer, an Accountant, and yes, even a Realtor. You must have a license to engage in the real estate market. Just this week in Detroit, Michigan, a woman pleaded guilty to impersonating an accountant a real estate agent, and practicing the art of real estate without a license. She should have been given jail time but was given probation. If you wish to read that article, click here.
During the past coronavirus pandemic, when millions were forced to stay at home, Illinois Governor J.B.Pritzher and Governors nationwide declared real estate agents/brokers as essential workers who were vital to the economy, so we had to put on our facial masks and go to work engaging the public Like. Superman, who wears an S on his chest, we Realtors pridefully display our Realtor’s logo through our actions, thoughts, and deeds for our clients. We are attached to our clients. We are not salespeople. We are Realtors strong. Check out this final group of charts. click here
Concluding Message to the Home Buyer.
The housing market is undergoing significant change. Throughout America, home prices are soaring, including in the rental market. Let’s briefly talk about the rental market. In the Chicagoland area, the end of the coronavirus pandemic saw a shift away from affordable rental units. That pattern reflected what happened in San Francisco a few years back. Today, only the rich can afford to live in San Francisco. I give it one or two more years, and the low to middle-income wage earners will find it hard to continue living in the Chicago area, including the suburbs. If you are looking to rent a two or 3-bedroom rental in the Chicagoland area right now, you know how much those rental units have increased.
Some people are looking to the government for assistance, but what comes is not enough to pay their rent /mortgage and bills. What people need will never come because, in all reality, we are a capitalistic society. The millennials can afford this high rent, and those who cannot afford the increases will be pushed out to who knows where. Most average Chicagoans who pay rent have one or two more lease increases before they are priced out of the area. That is just reality; unseen, wicked forces drive this greedy world.
Back to the home buyer, you need all the help you can get in these challenging times. The asking price you see for a home is now only the starting point. Yes, more homes are coming onto the market, but with the supply still low, those homes are attracting multiple offers. There will not be enough homes to satisfy the demand for quite a while. So what must a home buyer do today?
1:You should know how much you can afford to get preapproved.
2:If you have a particular school district you wish to live in, check the area out and see if you can afford it and, if not, have a backup option.
3: Be ready to play the game of buyopoly as mentioned above
4:Do not argue with the real estate agent about signing the agreement. It is the new rule of the land. Every day you delay will cost you money and a home someone else purchased.
5: Do not even think about interest rates dropping anytime soon; they are not coming down. Let’s say the rates do drop; it will only be a small fraction, and we will never see a 3% interest rate unless we have another recession. Some people still mistakenly say I will wait until the interest rates drop to buy a home. If home prices are not decreasing now, and if the interest rates fall, more buyers will get into the market, and the prices of houses will skyrocket. If you do not buy now, the cost of a home will be higher next year. Home ownership is slipping out of the hands of middle-income wage owners. Get off that fence and make a move before it is too late.
Do you like getting free online gifts? Then check this out.
Wheter you are a seasoned home buyer or a first-timer, here are two buying guides to assist you.
1: For the seasoned home buyer who needs the latest housing information, here is my 2024 Summer 2024 Home Buying Guide. click here
2: For the First time home buyer, this guide was created just for you. Like the buyopoly chart, follow the advice supplied >>>>>>>click here
3: For you homesellers out there. I want to thank you for reading this post. Here is your gift. The 2024 Summertime home seller’s guide. click here
Talk about value. The value of these three gifts alone is priceless. Wouldn’t you agree?
A Scam Alert is Going on right now!
There are a few homes on the market for sale, correct? If priced right, they are being sold quickly, correct? There is a scam going on that will trap people with either bad credit or low income. Like fishing, they will throw out bait that says rent with the option to buy. That sounds good if your credit is bad or you must save for a down payment. There were programs like that back then, and there may be a few legitimate programs today. Why am I bringing this subject up? Several people this week have called me regarding finding a home with the rent and the option to buy. They say they have seen ads on social media. When I tell them there is a shortage of homes for sale, they get angry with me and say companies are holding these homes in reserve for people like me with bad credit or low income
in reality, think about it. Homeowners who want to sell their homes today will now delay selling them, become landlords to people with bad credit who can’t manage their money, and hope they purchase their houses at the end of the option plan. That does not even sound right. Owners can sell their homes now for top prices and move on with their lives. That rent-to-buy option worked in the 1990s and early 2000s when buyer markets were available within certain areas, but not today. These internet ads say very little about the company they represent. They are designed that way. They want your information while giving you a few details about them. They are trying to prey on your desire to buy a home. They want access to your bank account and credit cards. If they get it, they will clean your bank account and be gone. But to cover myself, let me add this disclaimer. “There might be some legitimate companies out there who are seriously helping people acquire home ownership, and if you are, keep up the good work.”In reality, though, as that old rap song said. “Don’t believe the hype.”I have to call someone else on this subject today, and they will not be happy, but at least they got the truth from a licensed Professional. If they fall for the scam, my conscience is clear.
I started this post in April because people asked questions about the lawsuit verdict. I briefly answered them but had more to say on the subject, so I decided to write it down. Blog posts should not be this long, and I apologize. I also apologize for all the glitches, especially getting the last part of this blog out to the public. It should have been published weeks ago. I clicked on something I shouldn’t and have and paid the price. The system was temporarily infected but is now back to normal. Those serious about the housing market will take the time to read this post and see the value. Hopefully, they will share this post with others they know, and the general public will become more informed. That is all I want from this 3-part blog post. My office is located at 7300 N. Western Ave. is in the heart of the West Ridge neighborhood in Chicago. Whether you contact me or another agent, we are here to help you with your dream of becoming a homeowner, to help you sell your home, or to help you find a rental unit. Thank you for your time, and I especially thank Nardia Smith for all of her help with the graphics. Without her, this series of blog posts would not have happened. Thank you again, and take care of one and all.
Charles McShan
312 9143678
real [email protected]
Website http://www.charlesmcshanchicagolandrealtor.com
Facebook http://www.Facebook.com/charlesmcshanrealtor/
Please click the links below if you did not read parts 1 and 2 of this blog post.
For part one, click here.
For part two, click here.
