Every Buyer MUST Sign This! Buyer Broker Services Agreement

Christian: [0:03] Welcome to another episode of the Awesome in Seattle podcast. This is your host, Christian Nossum, of the Awesome Nossum Group at Wilson Realty Exchange, Inc, and I am joined today by the awesome Joanna Beecher.

Joanna: [0:13] Hi, guys.

Christian: [0:14] Hello, hello. Today's episode is a really important one, and one that we have been wanting to make since we heard this breaking news a few months ago. Um, and I'm glad that we're finally doing it, because it's one that's very important for all of you. Every buyer in the state of Washington now needs to understand what this is, and that is the brand-new buyer brokerage services agreement. The state of Washington, as of January 1st, 2024, now requires that every single buyer has to sign one of these agreements before we can do any s- real estate-related activities, at all.

Joanna: [0:49] Yes, every single one of you.

Christian: [0:51] Yes, no matter who you are or if we've worked together in the past or anything, everyone has to sign this, so- And

Joanna: [0:57] no matter what agency you go to-

Christian: [0:59] Mm-hmm … Joanna: you will be approached with the same thing. Yes. So what does this mean for you? So we're gonna do a quick summary real quick, give you the basics, and then we're gonna go into kinda a little more of the history and stuff like that after. So if you only wanna understand the basis- basics, just listen for the next, like, two minutes, and then if you wanna understand the history, you can listen for a little bit longer.

Joanna: [1:19] I think the history's pretty fun.

Christian: [1:21] Yes. So as of January 1st, 2024, the state of Washington has mandated the new buyer brokerage services agreement. Every buyer has to sign it, no matter what. And that is before, like I said, any real estate-related services are rendered by an agent or a broker. So what does this mean for you? Really not a lot different. It's really not that much different at all. Yeah. It's just, you're just signing something now, agreeing to it. So-

Joanna: [1:47] At the very beginning.

Christian: [1:48] At the very beginning, yes. Mm-hmm. So we at the Awesome Nossum Group never forced anyone to sign one of these in the past. They've always kind of been around. They were in a slightly different form, but they were always here. We never forced our clients to sign it, 'cause we didn't really feel like we needed to. Our clients generally trusted us and used us regardless, so it wasn't really an issue. But with all of the lawsuits going on nationwide against the Realtor association and specific brokerages, the State of Washington said, "You know what? We need to have a rule now that says how all of this is going to be laid out." So the basics are, there's a few different choices that you have as a buyer. You can choose to exclusively work with your broker, or non-exclusively work with your broker. What does that mean for you? Well, as a buyer, you have that option, and we at the Awesome Nossum Group have historically worked on an exclusive basis with all of our clients. And that's because our clients see the value that we provide, which is head and shoulders above the majority of brokers out there.

Joanna: [2:51] Yes.

Christian: [2:52] Between our Beers and Home Buying class, this podcast, our educational videos, all the stuff that we post on social media, which is a ton of educational stuff up there- Yes all of that is at no upfront cost to you. And because of that, our clients have always seen the value that we provided, so 99% of them have no issue signing an exclusive agreement with us, which is great. The next thing that you have to decide is compensation.

Joanna: [3:17] Yes. So

Christian: [3:17] Joanna, why don't you talk about that?

Joanna: [3:18] Well, this agreement also makes it very clear the way your agent is compensated, either the sell side or the buyer side. This will be more clear when we talk about the history- Mm-hmm … and how it came to be. But you will talk to us, your agents, about how the compensation works, and we will go over this one-on-one with you. Mm-hmm. And it will all be very clear.

Christian: [3:39] Yeah. Generally, though, the seller is still going to pay, the majority of the time, our commission, just like it's always been for the last- I don't know, 50 years, 40 years And you'll

Joanna: [3:49] see right now.

Christian: [3:50] You'll tell me in a minute. Yeah. How long has that been happening?

Joanna: [3:53] Okay, so really quick, this is a brief summary of the history. I promise not to bore you. The early 20th century is when real estate saw its beginnings- Mm-hmm … the real estate industry. That's when the National Association of Realtors was formed, and that was in 1908.

Christian: [4:07] 19-aught-8.

Joanna: [4:09] Yas. Buyers at that time had to drive around to different agencies to know what homes were for sale.

Christian: [4:19] Mm-hmm.

Joanna: [4:19] Ugh. Or even more fun, just drive around town until you saw a for sale sign.

Christian: [4:25] Mm-hmm.

Joanna: [4:26] That seems very inefficient. In fact, it was very inefficient. Then fast-forward, in the early 1960s, the National Association of Realtors began the MLS, which is the multiple listing service, and this allowed brokerages to share their listings in one book. Mm-hmm. So these books would be compiled, and they would be delivered to each of the brokerages. And then the sellers had their agents, the listing agents, and then there was also other agents that were subcontracted, called sub-agents, and these people would help them sell homes- Yep … for the seller. And even if it wasn't their listing- Mm-hmm they were helping the sellers find their buyers. So the

Christian: [5:07] buyer was never represented by-

Joanna: [5:09] Never … Speaker: a, a agent, a broker- No … anything. They were always a sub-agent to the seller. Yep, they were always loyal to the seller- Mm-hmm … and that left buyers confused, and without anyone looking out for them and their best interests, and it was never made clear to the buyer that no one was looking out for their best interests. They were not represented. So it wasn't until the early 1990s that buyer's agency, uh, was established, and agents were now specifically representing the buyers, and there was no more confusion with who was representing them or not. Now, we also are in the age of the internet.

Christian: [5:43] Mm-hmm.

Joanna: [5:43] Right? So that makes it really easy to see what's coming on on the MLS through fun things, you know, like all of those- Websites those apps- Yeah … that you guys use to scroll and

Christian: [5:52] we use. You no longer have to come to our brokerage and look at a book, or even before that, I have heard stories at our brokerage about how they were on, like, three by five recipe cards. And you would, like, flip through those, and that was all the houses that came out that week. It was crazy.

Joanna: [6:07] I remember the books, I have to say. Mm-hmm. It was when I was little, I thought it was fun to grab them, like, when you're walking and there was a store front brokerage- Oh,

Christian: [6:15] yeah … Joanna: and they'd have the books outside. Those are a little different than what- the books they had. They had, like, binders. Oh, they had

Joanna: [6:19] giganto books.

Christian: [6:20] Yeah, like binders- Okay … with pages in it, and then- No,

Joanna: [6:23] I would just take the

Christian: [6:23] little ones. Yeah, yeah, yeah. I remember those. Yes. So yeah, then the internet came around, and that made things a lot easier- Mm-hmm … for buyers to understand what was out there. The state of Washington was one of the first states that made buyer's agents an actual thing, where the buyer was actually represented by an agent. The state of Washington, honestly, has really been at the forefront forever with all of these rules, helping and being, uh, on the buyer's side, which is great.

Joanna: [6:51] I believe I was told that it was, like, the end of the '70s that- Mm-hmm … Washington State actually started to have buyer's agents- Yes … which apparently is 20 years almost, you know-

Christian: [7:02] Yeah

Joanna: [7:02] before the rest of the nation.

Christian: [7:05] Mm-hmm.

Joanna: [7:05] That's pretty great.

Christian: [7:06] Yep. And so going back to the history, so the seller, every agent represented the seller, so the seller was always the one paying both agents, the buyer's agent and the seller's agent- Yes … the listing agent. This continued and still continues to this day. So the seller is always the one that pays, or was always the one that paid both sides. In situations where, and this is the compensation thing that we kind of talked about earlier, in situations where the seller is choosing not to pay the buyer's agent, that's where this agreement comes into play, and it goes, okay, well, how is this agent going to be paid? How is your agent as a buyer going to get paid for doing all this work for you? They're making that clear, and that's why this buyer, ah, brokerage services agreement is in place. Part of the reason why is to just make that clear and make everyone understand. Generally, how it's gonna work if there's no, which we've never seen that at this point, two months into the year of 2024, where sellers are not choosing to pay, it just isn't happening, so it doesn't make sense. But if they were to say, "No, I'm not offering any compensation for a buyer's agent," that's when we as your agent are going to go to bat for you so that you don't have to pay that out of your pocket by negotiating on your behalf. We'll see how that works. W- when and if that comes up- Yeah … we're just gonna work the best we can and the hardest we can to make it so that you don't have to. If there is a situation where n- the seller's not willing to, we'll go from there, and we'll work out something with you as a team.

Joanna: [8:38] I do want to say that I believe one of the other reasons once the buyer's agency came around that the compensation stayed the same- Mm-hmm … you know, kind of standard I guess- Yep we'll say, where the seller's paying, is because buyers are already paying so much money up front- Mm-hmm … that to also come up with compensation for their agent doing their job was, seemed to be more difficult. So they wanted to find a way where they could also include it in their financing, and then that made it much easier and less stressful for the buyers themselves. Yep. So I thought that was kind of interesting, and, you know- Made

Christian: [9:18] sense … Joanna: makes sense. Yeah. Absolutely. Yep. So that's it for this episode of the Awesome in Seattle podcast. This is all about the buyer's brokerage services agreement. If you ever have questions, do not hesitate to reach out, uh, to us about this. Again, if you are thinking about buying, we- We're here … we are here. We would love to help you. Come to our beers and home buying class. It's totally free. It's only an hour.

Joanna: [9:42] And it's fun.

Christian: [9:42] It's super fun. It's super laid back, very simple, and we host them every single month all around town, sometimes multiple times a month. And they're, they're just fun. It's an easy way for you to really get a good base knowledge of the home buying process.

Joanna: [9:57] Because you don't know what you don't know till you find out.

Christian: [10:00] Exactly, and that's why after that we offer strategy sessions, a one-on-one meeting where we can answer those questions that you just realized you had now that you understand the basics. So- Yes … we have a whole system set up for our buyers. It goes from coming to a class to getting your keys, and we have it all laid out step by step by step. Just do this step first, then this next step, then the next step, then the next step, and it just makes sense. Our system is really something that we created on our own. This is not kinda the standard. This is one that we went, "Hey, this system that everyone else is doing doesn't make a lot of sense."

Joanna: [10:35] No.

Christian: [10:35] Let's rethink this. Let's use some common sense here and go with that approach. So that's what we've done. That's why we've had so many successful buyer clients over the years. We've helped- Hundreds and hundreds of people that s- came to our Beers and Home Buying class successfully buy.

Joanna: [10:50] Yeah. We want you to feel comfortable in the driver's seat.

Christian: [10:52] Mm-hmm. And

Joanna: [10:52] the best way to do that is with education.

Christian: [10:54] That's it. And you don't regret your decision if you're informed. So let's help you get informed so that you can make a smart choice. If you do wanna come to one of our classes, just go to beersandhomebuying.com (opens in a new tab). That's beers with an S, like the drink beer, beers with an S- Mm-hmm … and homebuying.com. That's it. We'll see you next week on the Awesome in Seattle podcast.

Joanna: [11:14] Bye, guys.

Christian: [11:14] Bye.