Have you noticed any changes at public open houses?

Why in the heck do I have to sign this?

Well, here we are on Day 4 of the Brave New World of Real Estate.  Whew.  This has been a 9-month Odessey of training and preparing our Agents for this time.

So again, let me give you a recap of why we are here:

·       The lawsuits really had nothing to do with commissions to Agents or Sherman Anit-Trust; those arguments were the gasoline to fuel the engine of the lawsuits.

·       What was really at heart was transparency and contractual obligations.

o   Transparency of how Real Estate Agents are paid.

o   Transparency of Agency duties owed by Agents to their clients.

o   The need for all parties involved in a transaction to have contractual agreements with their respective Agents.

First, Transparency of how Agents are paid:

·       This is a good thing.  Traditionally both Listing Agent and Buyer Agent compensation was paid by the Seller.

o   This has always been disclosed in the California Listing agreements but not , necessarily clear to Buyers.

o   In a national survey, 60% of new homeowners thought their Agent worked for free.  So, transparency is a good thing.  You need to know where your Agent’s compensation comes from.

o   Going forward, this is still most likely to be the method of compensation to a Buyer’s Agent.

Next, Transparency of Agency Duties:

·       This falls into two categories. 

o   Buyer Agents are required to have a written contract with their Buyers prior to showing a property.

o   Listing Agents are required to disclose Agency duties at Public Open Houses to Visitors at the open house.  This is why Open Houses have changed now.

All parties involved in a transaction now need to have contractual agreements with their respective Agents.  There’s no getting around this.

So, let’s talk about What to Expect at a Public Open House.  You need to know the WHY behind what you should expect and what your rights are.

The first thing you will notice is an Open House Sign-In sheet.  I know…. In the old days, Agents were trying to get Buyer information to contact unrepresented Buyers and try to get them to be clients.  In our new world, the Sign in has several purposes.  And the form is known as the:

Open House Visitor Non-Agency Disclosure and Sign In – OHNA-SI

• This is required to inform you of Agency duties that the Agent at the Open House owes to the Seller (and NOT to you!).
• Use of the form at a Public Open House discloses to the Visitor that the Agent is allowed to show Visitors the property under the following terms:
• That the Agent does not have a written representation Agreement with the Visitor.
• That the Agent at the Open House is an Agent of the Seller.
• That any communication or discussions you, the Visitor, may have with the Agent are NOT confidential.  So as in the Miranda Rights statement, “anything you say can and will be used against you!”

• Visitors are NOT REQUIRED to sign the OHNA-SI form to view the property (but not signing may impact your potential discussions with the Listing Agent, upon entering).
• If Visitor refuses to sign the form, the Listing Agent should ONLY discuss what is on the Open House Flyer or factual information about the property.
• Any further discussion by the Agent offering advice to you (the Visitor) could be construed as Ostensible or Apparent Agency without a Buyer Representation Agreement… which is a violation of the NAR Settlement.
• And extended discussion with a Visitor that has not signed the OHNA-SI could also be construed as Undisclosed Dual Agency, which is a huge NO-NO with the Department of Real Estate.
• Above all, you are NOT required to sign this form to view the property.  If an Agent tells you otherwise, they are DEAD WRONG!
• Okay…. I guess a Seller could instruct their Listing Agent to not allow any Visitor to view their home if they do not sign this form.  However, I have never seen such an instruction in the past and have not seen one yet.

• What should you know if you are represented by an Agent?
• Your Agent should explain the new Open House protocol.
• They should explain to you that it is okay to sign the OHNA-SI form.
• They should explain to you it does not obligate you to anything.
• And if you do not sign it, the Listing Agent may be restricted in what they can discuss with you at the Open House.

Lastly, the Open House Visitor Sign-In form has a signature line and an email address line.  Feel free to sign the form; this does NOT obligate you to anything.  If you do not want to leave your email address, don’t.  Leave it blank or write in donaldduck@pixar.com.  I sincerely doubt that anyone will check the validity of any email addresses.  We just simply need to make you aware of duties owed to all parties in this new world.

Thank you and feel free to call me with any questions.