Important changes for homebuyers in Indiana: understanding the new buyer agency agreement

 

For homebuyers in Indiana, recent changes have brought a greater focus on transparency and formalized buyer representation in real estate transactions. These changes, stemming from Indiana law and a national settlement involving the National Association of Realtors (NAR), aim to provide clarity regarding the services you receive and how your agent is compensated.

 

1. Written buyer agency agreement is now required

 

As of July 1, 2024, Indiana law (House Enrolled Act 1068) requires all licensed real estate brokers to have a written agreement with buyers to formalize their agency relationship.

This agreement, often called a Buyer's Exclusive Agency Contract, outlines the services your agent will provide, your expectations, and clarifies your agent's duties under Indiana law.

You will be asked to sign this agreement before your agent can show you homes listed on the Multiple Listing Service (MLS), whether in-person or virtually.

This ensures that you and your agent are on the same page and that your interests are being professionally represented from the beginning of your homebuying journey.

 

2. Agent compensation is explicitly stated and negotiable

 

A key part of the new agreement is a clear statement of how your agent will be compensated.

Traditionally, the seller would pay the commission for both their listing agent and your buyer's agent. However, under the new rules, this is not automatically assumed, according to Realtor.com.

The new rules emphasize transparency, meaning the buyer's agent compensation is now explicitly part of the negotiation process, according to Empire Learning.

 

The agreement will specify a compensation amount or rate (e.g., flat fee or percentage), not an open-ended statement like "whatever the seller is offering".

Crucially, agent compensation is always negotiable and not set by law.

While the responsibility for your agent's compensation rests with you as the buyer, you can still request, negotiate for, and potentially receive contributions towards their fee from the seller or their agent as part of the overall transaction. This might involve structuring your offer to include seller-paid contributions towards closing costs or a slightly higher purchase price that encompasses the agent's fee.

 

3. Benefits for homebuyers

 

Transparency and protection: The written agreement clarifies the responsibilities of your agent and how they'll be paid, ensuring you have a dedicated advocate working in your best interest.

Clear expectations: You'll have a better understanding of the services you'll receive, helping to avoid misunderstandings during the homebuying process.

Negotiation power: Knowing how your agent is compensated upfront allows you to negotiate terms that work best for your budget and needs.

 

In conclusion

 

These changes to Indiana real estate law are designed to provide greater clarity and professionalism in the home buying process. By understanding the new buyer agency agreement and how your agent is compensated, you can confidently navigate the current real estate market with the assurance of dedicated representation. Remember to discuss any questions you have about the agreement and compensation with your real estate professional to ensure you have a full understanding before moving forward.

 

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