Cities enact their own tree protection ordinances, which are specific to that city. A long-time Palo Alto resident recently posted about his protected tree removal attempts to force his neighbor to...
Real Estate Agent Commission
A big change was made to real estate sales in 2024. Now, a real estate agent has to get a written agreement with a potential buyer before they can tour a home with them. Much of the rationale for this change centered on the fact that home sellers typically paid a commission to the real estate agent who represented the buyer. Claims were made that sellers should not be forced to pay for the buyers’ agent and that buyers should pay for their own agent.
In Silicon Valley, real estate commissions have been negotiable for many years. The default practice has been that the sellers pay all commissions, and the total commission is approximately split between the sellers’ agent and the buyers’ agent. A benefit is that the buyer does not have to come up with cash to pay a commission, reducing how much cash he has for a downpayment. Having a larger downpayment enables the buyer to qualify for a larger loan.
Currently, many real estate agents who work primarily with buyers struggle to adapt to the change. Previously, home buyers did not have to, and typically wouldn’t, make any commitment to a real estate agent until they were ready to write a purchase offer. Now, the real estate agent has to get them to make a written commitment.
With the need to get a written agreement with a potential buyer who is hesitant to make any commitment, the size of the commission is likely to fall. However, many real estate agents will probably be unable to effectively adapt to the change and be forced out of the business. It is much easier for an agent representing a seller to manage their time effectively than for an agent representing a buyer. This change is likely to shift even more power to the more established agents who typically represent sellers.
The written agreement must specify the agent’s compensation (commission) and the length of the agreement. It should also describe the services the agent provides. Typical services would be finding properties, showing properties, analyzing property values, and preparing and submitting purchase offers.
Many home buyers believe they can find the home and don’t need any assistance doing that. The median days on the market, DOM, for Silicon Valley homes for sale is about 10 days. Even with the available internet alerts, it would be challenging for a home buyer to respond in time for a newly offered home.
Although detailed up to date plots of Silicon Valley real estate trends are publicly available, the understanding gained from the daily professional involvement of a real estate agent is only available by working with an active agent.
Many of the trend plots publicly available are simply republished plots created by the Multiple Listing Service. A handful of Silicon Valley real estate agents create more informative plots of Silicon Valley real estate trends.
JLee Realty Homes For Sale
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