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Changes to Real Estate Transactions: What You Need to Know

As of August 17, 2024, there are new requirements for real estate transactions that could impact your buying or selling experience. Here’s what you need to know to navigate these changes smoothly:

What’s New?

For Buyers:

  • Written Agreement Required: Before touring homes, either in person or online, you will need to sign a written agreement with your real estate agent if they use the MLS (Multiple Listing Service). This agreement outlines the services the agent will provide and the associated costs.

  • No Agreement Needed for Open Houses: You can still speak with agents at open houses without a written agreement.

  • Compensation Terms: The MLS will no longer list buyer’s agent compensation details. You will negotiate this directly with your agent before viewing properties.

For Sellers:

  • Agent Compensation: The compensation for buyer’s agents remains negotiable. Many sellers may choose to cover this cost as part of the deal, which can be included in your agreement and reflected in the offer to purchase.

How to Pay Your Buyer’s Agent

If you’re concerned about covering your buyer’s agent’s fee, here are 3 options to consider:

  1. Direct Payment: Pay the agent’s fee from your cash reserves.

  2. Adjust Your Down Payment: Use a portion of your down payment to cover the fee. For instance, instead of a 10% down payment, put down 7% and use the remaining 3% for the agent’s fee. Note that this could increase the cost of mortgage insurance)

  3. Include in Sales Price: Add the agent’s fee to the sales price and request that the seller covers it. Ensure that the appraisal supports this higher sales price.

Should Sellers Pay the Buyer’s Agent?

Traditionally, sellers have compensated both the selling agent and the buyer’s agent from the proceeds of the home sale. With the new rules, here’s why considering this option might still benefit you:

  • Increased Offer Attraction: Buyers may be more inclined to make offers if they don’t need to cover the agent’s fee themselves.

  • Higher Asking Price: You can increase your asking price to cover the agent’s fee, provided the market supports this value.

  • Enhanced Sale Process: Buyer-side agents will help sell your home by scheduling tours with qualified home shoppers.

  • Avoid Dual Agency: You will avoid the need for dual agency, where your agent must represent both you and the buyer rather than focusing on your best deal.

Negotiating buyer’s agent compensation can ultimately help you achieve your goal of selling your home at the price you need.

Need More Information?

Understanding these changes can help you make informed decisions in your real estate journey. If you have questions or need further assistance, feel free to reach out. The Greenway Team is here to help!

Contact Greenway Mortgage


 

For many would-be homebuyers and sellers, 2024 has been a waiting game.

Overall, both groups are looking for lower interest rates. And while mortgage rates have fallen from their recent highs, they are still dampening affordability for buyers and keeping current owners locked in.  

There's more to the market than meets the eye. We're still helping homeowners and homebuyers every day. And if you need us, we're here to help you too.

Here's our take on where things stand today:

  • Homeowners with a mortgage loan have an estimated $16.9 trillion in home equity.* Values are still rising this year, though at a slower pace.
  • At their June meeting, the Federal Reserve Board projected two policy rate cuts still to come in 2024. Mortgage rates can fall in anticipation of future Fed action.
  • The number of homes for sale hit its highest seasonally adjusted level since mid-2020* More competition can help to keep prices in check.
  • The recently released Consumer Price Index shows inflation continuing to cool. Slowing inflation can be good for rates and overall affordability.

Our role in today's environment is to find ways to help our clients move forward, even if the market feels stuck. We help our clients get cash from their equity, access helpful programs, lower their interest rates, and more. 

Let us know how we can help you! 888.616.9885


*June 2024 ICE Mortgage Monitor

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When will the elusive rate cuts arrive? 

As expected, the Federal Reserve Board left policy rates unchanged at their most recent meeting. Investors – those who actually control mortgage interest rates – were listening for hints of future action.  

Are rate cuts still on the board for 2024?

In March, Board members projected three policy rate cuts in 2024. At the May 1st press conference, Chairman Jerome Powell reaffirmed the Board's commitment to reaching 2% inflation. He also said, given current data, the Board expects achieving this goal to take longer than previously thought. As always stated, Powell affirmed that future data will determine when and if cuts are made in 2024.

If you can afford to purchase a home now, this may be the time to do so. Here's why: 

As home prices rise, the possibility of lower rates later may not be enough to make mortgage payments more affordable. It's worth a chat.

  • We have mortgage calculators to help you weigh the potential costs when buying at a higher rate or a higher price.

  • We also have loan programs that can help mitigate higher rates. A hybrid ARM, for example, offers a lower initial rate before adjusting to fixed rates later. Fixed rate buydowns and HELOCs can help you move forward with your plans, too.

If you want to wait on your next purchase, this is a good time to prepare. A qualification consultation or even a mortgage pre-approval is a great place to start.

Background on the Fed:

  • The Federal Reserve Board (the Fed) controls the federal funds rate and discount rate, which are charges for overnight loans from bank to bank or from the Fed to member banks.

  • This rate was lowered to near zero in March 2020 in response to the pandemic. 

  • The Fed has a standing goal to maintain inflation within a 2% range. When historic inflation hit in March 2022, they began a cycle of rate increases to slow spending and bring it down.

  • As inflation slowed and came nearer the goal, the Fed paused its cycle. May was the sixth consecutive meeting with no increase. 

Bottom Line:

If this is your time to buy, refinance or access cash from equity, don't let uncertainty about rates slow you down. We're here to help, and we're still closing loans every day! 888.616.9885

Get Pre-Approved Today with Greenway Mortgage


 

The extraordinarily low rates of 2020-2021 were a response to the pandemic. Unless something equally devastating happens, we are not likely to see them again. There's another opportunity you could miss today.

Homebuyers waiting for tomorrow's lower rates may miss out on today's prices.

Home prices are rising at a slower pace than before. If rates fall and the market heats up, prices are likely to soar. The cost of rates today may be lower than the cost of price increases later. Buying the home you can afford now – even if it's not the one you want forever – can work in your favor.

You'll build equity through your regular payments and any value increases. Should rates fall, you can put equity earned toward another purchase or a favorable refinance.

Nobody can tell the future. Remember the plans we made in 2019?

Yet, history offers homebuyers two important lessons:

  • Real estate values typically grow over time.
  • People who purchased homes at rates much higher than today's still benefitted in the long run.

Bottom Line

We have programs to help first time buyers and repeat buyers move into new homes no matter the rate environment.

Reach out to explore your options today. 888-616-9885

Contact Greenway Mortgage Funding Corp


 

There could be more flexibility in fees!

The National Association of Realtors (NAR) recently settled a global lawsuit regarding agent compensation policies and home listing requirements. With court approval, the changes are scheduled to go into effect in mid-July 2024.

What are current practices?

Home sellers typically pay commissions to both their own agent and any buyer's agent. Commissions vary but are commonly 5% to 6% of the sales price.

Selling agents using the NAR's Multiple Listing Service (MLS) show the amount a buyer's agent will earn from the sale. The major changes include:

  1. The seller will no longer automatically pay both agents, though they can choose to do so.

  2. The amount the buyer's agent will make from a sale will no longer appear in MLS descriptions.

  3. Sellers and buyers will have more flexibility in their negotiations, which could result in lower commission costs and lower home prices.

How will the changes impact the process?

  • Sellers can still negotiate the commission they pay, and they may be able to secure a lower cost. They can agree to pay commission for the buyer's agent, but it's not required.

  • Buyers can negotiate both the commission they will pay and how they will pay it, whether out of pocket or through other avenues.

The bottom line is that buyers and sellers will still compensate agents for the many services they provide, and these fees will be negotiable, like always.

Your real estate agent and Greenway's Loan Officers will stay up on any changes that may occur before court approval. Please reach out with any questions or concerns, and we'll be happy to assist.

Contact Greenway Mortgage


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