I was at the annual Iowa Association of REALTORS convention for a couple days this week and it was good. There are always many educational sessions to choose from and I always like to attend the Q&A sessions with three of the best real estate attorneys in the state. This year, most of the questions were about the written buyer agreements to fulfill the new rules that took effect this year.
I have written about the new rules in previous newsletters, but in case you are not aware,
new rules that NAR (National Association of REALTORS® ) implemented as part of a court settlement require a buyer to enter into a written agreement with a brokerage, much like a seller enters into a written listing agreement with a brokerage. A REALTOR® cannot show a property, or prepare an offer to purchase a property, before the buyer has signed a written buyer's agreement. This new rule went into effect nationally on August 17, 2024, but the state of Iowa took action early and the Iowa House and Senate passed the
Iowa Real Estate Transparency Act that went into effect on July 1, 2024.
Since July 1st this year, any consumer who wants a licensed real estate agent in Iowa to show a property has been required to enter into a buyer agreement before the showing takes place. This does not apply to open houses. This agreement is a contract between a broker and a client establishing the services being provided by the broker and the broker’s compensation for those services. These agreements will include a geographic area for the property search, for example, Des Moines Metro area, Central Iowa, Warren County, or even the city of Norwalk. They will also include the date that the agreement will end, the broker fee, and any additional terms that might apply.
The reason why the property type and geographic area are important. Specifying these things allows a consumer searching for multiple properties in different geographic areas to have buyer agreements in place with brokers in those different areas at the same time. The same thing applies to different types of properties. A consumer could have a signed buyer’s agreement with a residential agent to purchase a home, and a commercial agent to purchase a property for a business at the same time.
I learned during the convention that there have been several cases already where a client who had signed a buyer’s agreement with one broker to see a property, later signed a buyer’s agreement with another broker who actually wrote an offer that was accepted, while the first buyer’s agreement was still in effect. These buyers are now contractually bound to pay a broker fee to both brokers.
So, this is what I want you all to understand. You are not just signing a form to see a house; you are entering into a contract with a broker. Make sure this broker is the person you want to work with. If you are new to an area and don’t know any real estate agents, only sign a buyer’s agreement to see one property that expires quickly until you build a relationship with that agent. Read the agreement before you sign it and ask questions! Most brokerages are using their own version of the buyer's agreement, so there isn’t one version being used by everyone.
I am happy to discuss this with you if you contact me. This has been a major shift in the way many real estate agents have been doing business, and agents and consumers both are adjusting. My office has followed the implementation of these new rules throughout the entire process so we can accurately inform our clients.
Norwalk IA Real Estate –
Jon Niemeyer, Broker/Owner/REALTOR® at EXIT Realty North Star. I list and sell real estate in Central Iowa including Norwalk, Des Moines, West Des Moines, Cumming, Indianola, Carlisle, Waukee, Urbandale, Grimes, Clive, Johnston, Ankeny, Altoona, and Pleasant Hill in the Counties of Warren, Polk, Dallas, and Madison. Call
Jon Niemeyer at
515-490-4675.