What Are The New Rules For Minneapolis Duplex Buyers?

News about recent changes to the real estate industry has been hard to avoid the last week. Very little of it has been entirely accurate.

For most states, the most notable change following the NAR settlement is that buyers are responsible for paying their Realtor’s commission. In 14 states, including Minnesota, this was already the case.

This amount is and was negotiable. And most of the time, it was reduced by any compensation the buyer’s broker offered to offset it.

In other words, it was included in the price. Objectively, that meant the buyer paid it.

What will be different going forward is buyers and their agents can be less confident the seller is offering compensation. Similar to closing costs, buyers and their Realtors will simply need to ask for it to be included in the purchase price.

In Minnesota and nationwide one of the biggest changes is every buyer will be required to sign an agreement with a Realtor before entering the property.

That’s non-negotiable. Realtors can incur significant fines and even risk having their licenses revoked for failing to have some sort of document signed.

There are five kinds of documents buyers and Realtors can sign:

1. Agency Relationships In Real Estate Transactions – this form is required in all transactions. It simply defines the different kinds of representation a consumer can have with a real estate brokerage and Realtor. It is a required disclosure upon any first substantive meeting between a prospective buyer or seller and a Realtor.
2. Touring Agreement – This new form may be used when an unrepresented Buyer contacts a listing agent directly to see a property, or wishes to see only properties listed by that brokerage. In this case, the Realtor and Broker represent the seller. The Realtor does not owe the Buyer any fiduciary duties, but will deal honestly with all parties in compliance with the law. Buyer may pay the Realtor nothing, a flat fee, a per-tour fee, an hourly fee, or, in the event of a purchase, or compensation in the form of a commission.
3. Facilitator Agreement – Under this agreement, a Realtor can provide a buyer with information about available properties, comparable sales, show available properties, and direct buyers to lenders, title and inspection companies. However, the Realtor may not share their expertise, nor negotiate on the buyer’s behalf. The Buyer pays the Realtor an agreed upon amount, unless the Seller is offering compensation to offset it.
4. Buyer’s Representation Contract: Non-Exclusive – While this agreement provides all of the services detailed in number 3, the Realtor may also offer their professional knowledge and experience, as well as advocate on the buyer’s behalf. As this is a non-exclusive agreement, most buyers use this form of representation only with Realtors who bring them the deal an offer is written on and may be simultaneously using multiple agents to find properties. The Realtor is paid by the buyer, unless the Seller offers some sort of compensation.
5. Buyer Representation Contract: Exclusive – Under this agreement, the buyer agrees to work exclusively with the Realtor, allows the agent to find property, provide guidance and expertise,  and negotiate on their behalf. The Buyer is again responsible for paying the commission, unless the Seller offers compensation to offset this.

In addition to helping make clear what a fees the buyers may be responsible for, these forms also help the consumer understand the scope of services that may be offered in each type of relationship.