CA AB2992: Allows buyer to walk away from buyer-broker agreement

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CA AB2992: Allows buyer to walk away from buyer-broker agreement

https://dre.ca.gov/Licensees/Advisory_2024_11_14_Changes_to_Buyer_Representation.html
Account Closed
Investor · Member since 2023 · 118 posts · 61 votes

I'm curious how CA agents can make a living with laws like AB2992 that state:

  • "If the out-of-pocket costs to pay their agent remain too great and the seller and buyer have not yet reached an agreement on the sales price and/or terms, the buyer may walk away from the subject property provided there is an exit clause, proceed without representation, or approach the seller's agent about possible dual agency representation."
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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    1y
    Quote from @Account Closed:

    I'm curious how CA agents can make a living with laws like AB2992 that state:

    • "If the out-of-pocket costs to pay their agent remain too great and the seller and buyer have not yet reached an agreement on the sales price and/or terms, the buyer may walk away from the subject property provided there is an exit clause, proceed without representation, or approach the seller's agent about possible dual agency representation."

    The reality is I think your going to see a lot of this.. I know I just ratified a transaction where I was selling a new build ( not yet built) and the broker representing the buyer had a very high buyers broker agreement that simply does not work for builders and what we have to do to manage the process. As the buyers agent simply cant add value more than bringing the buyer to us.. So with the full fee we counter offered and that busted the buyers budget so they could not get the really cool upgrades the wife wanted.. And so even though the agent was very rude to us about this we did put it together and we pad what we normally pay.. As the buyer wants that house.. So its a benefit to the seller to be able to counter the  commission right on the counter offer form so its there in black and white.. I always even when we could do BAC on the listing put the commission in terms of dollars never %. Folks have a hard time with Math.. And so when the counter shows a five figure commish the broker has a hard time explaining why that kind of money is a bad deal for them..
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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    1y

    PS been a CA RE broker since 77 I think.. and I dont sell RE any more but if I got back into working with the public ( I only sell properties i own). I would 100% full stop just be a listing agent I would not work with buyers unless they were very well known to me..

    Or I would be expecting the BACs to be all over the map. 

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