Kelle

Looking to buy your next home? Our team of real estate attorneys has you covered, handling everything except showing you properties. You find the place you love, and we’ll handle the rest. Skip the realtor – we provide services that save you money and offer enhanced legal protection.

 

 

 

 

A recent NAR ruling has reshaped the real estate landscape, prompting a reevaluation of traditional practices with regards to agents’ compensation. Due to a lawsuit by the Department of Justice against the National Association of Realtors (NAR), effective in August 2024, real estate agents must change how they contract their services and disclose their commissions to their clients upfront. This change, along with several others negotiated in the settlement, aims to promote a more transparent commission arrangements between buyers, sellers, and their agents.

Why the Change?

Previously, property sellers signed a listing agreement with a selling agent or brokerage, agreeing to a total commission (typically 6% of the purchase price) to be paid at closing by the seller. This agreement also specified the amount paid to the buyer’s agent, usually half. These commissions were technically negotiable, but, as alleged in the lawsuit, buyer’s agents were “steering” or filtering their prospective buyer clients to listings with the highest commissions only. Consequently, selling without a listing agent who was not a member of NAR (and thus not accessing the MLS), or selling “by owner” only, made marketing the property challenging ,if not impossible, due to buyer’s agents not showing the properties to their prospective clients (many of which had no knowledge their agent was avoiding such properties). The NAR lawsuit argued that this system was anti-competitive.

What Has Changed?

Starting in August 2024, under the NAR settlement, offers of compensation between buyer and seller agents will no longer be allowed in MLS listings. Buyer agents must now create and execute a Buyer Broker Agreement with potential buyers, detailing the agent’s compensation at the beginning of the representation. If the seller won’t cover the commission, the buyer must pay the difference or negotiate other compensation. This change means buyers will reconsider the cost of agent services, and sellers won’t be forced to pay buyer agent commissions just to list on the MLS buyer’s agents can no longer “steer” their clients to listings with the highest compensation.

Leading the Change

Our Real Estate team has diligently examined the implications of these changes, focusing on the fundamental shifts affecting sellers, buyers, and agents. Through our analysis, we’ve identified a pivotal opportunity: the evolving role of buyers’ agents, rendering them dispensable. This transformation underscores our commitment to offering a compelling alternative, grounded in professionalism, accessibility, and ethical standards.

Why Choose Us Over a Buyer’s Agent?

At Kelley Kronenberg, we prioritize your financial and legal well-being, offering a breadth of services designed to protect your legal and financial interests.

We Safeguard Against Unlicensed Practice of Law

Unlike traditional real estate agents, our team comprises licensed attorneys, ensuring every contract is legally sound and binding. The unlicensed practice of law occurs when individuals who are not licensed attorneys perform tasks that are legally reserved for lawyers. This can include drafting legal documents, providing legal advice, and interpreting or applying legal principles to specific situations. Traditional real estate agents, while knowledgeable about the market and transactional processes, are not authorized to provide these critical legal services.

The Risks of Unlicensed Practice of Law

  • Unauthorized Modifications: Modifying standard forms to suit specific needs can cross the line into unauthorized practice of law. Real estate agents are restricted to using approved templates and cannot create or modify legal clauses without risking significant legal issues.
  • Inadequate Legal Advice: Only licensed attorneys can provide comprehensive legal advice. Real estate agents might offer guidance based on their experience, but they cannot fully assess the legal implications of your transaction or advise on issues such as title defects, contract disputes, or legal rights and obligations.
  • Incorrect or Insufficient Contractual Provisions: Real estate transactions involve complex legal documents that must be accurately drafted to protect your interests. Non-lawyers may use incorrect or outdated forms, leading to unenforceable agreements and potential legal disputes. At Kelley Kronenberg, each of our contracts is customized to our client’s transactions and unique legal needs, ensuring every legal protection needed is included.
  • Legal Consequences: Engaging in the unauthorized practice of law can lead to severe penalties for the non-lawyer, including fines and criminal charges. For clients, this practice can result in invalid contracts, lost property rights, and costly litigation.

Why Use Kelley Kronenberg?

Our licensed attorneys handle all aspects of your real estate transaction, from drafting and reviewing contracts to providing sound legal advice. Our approach ensures:

  • Legally Binding Contracts: Our attorneys meticulously draft contracts to ensure they are legally enforceable and tailored to your specific needs. This precision helps prevent future disputes and protects your interests.
  • Custom and Comprehensive Agreements: Our agreements are meticulously crafted to safeguard your interests, providing immediate and long-term protection. We understand that a real estate contract is more than a mere transaction; it’s a vital document that demands legal scrutiny. By customizing each contract, we address your unique needs and circumstances, ensuring robust protection throughout the transaction process.
  • Comprehensive Legal Guidance: We provide thorough legal advice on all aspects of your real estate transaction. Our attorneys can explain complex legal concepts, assess potential risks, and advise on the best course of action.
  • Protection from Legal Risks: By having licensed attorneys handle your transaction, you are safeguarded against the pitfalls associated with the unauthorized practice of law. Our expertise ensures that all legal documents and procedures comply with current laws and regulations.
  • Conflict Resolution: Should any issues arise during your transaction, our attorneys are equipped to handle negotiations and legal disputes, ensuring your rights are protected at every stage.

Financial Benefits

When using Kelley Kronenberg, you will benefit from the protections afforded by our legal guidance and expertise and reap substantial financial benefits.

  • Flexible Payment Options: We offer variable and convertible payment options, empowering you to choose the method that aligns with your needs.
  • Capped Service Fees: Our services are capped at 1% of the purchase price, delivering substantial savings for buyers.
  • Reduced Loan Sum: By eliminating commissions to buyer’s agents, buyers can significantly reduce the sum of loans required, enhancing their financial well-being.
  • Cost Savings on Title and Transaction Handling: Entrusting us with both title and transaction management translates to additional cost savings, optimizing the overall financial outcome for our clients.

Comprehensive Services for Buyers and Sellers

We provide full title, escrow, and closing services tailored to your unique needs. Unlike traditional title companies, we offer the added advantage of a full-fledged real estate law practice, ensuring comprehensive support and resources to address any complexities or disputes that may arise.

Our services include:

  • Adverse possession
  • Easements and encumbrances
  • Forgeries and fraudulent conveyances
  • Legal description reformations
  • Mobile home title certifications
  • PACE lien-priority and validity disputes
  • Quiet title actions
  • Restrictive HOA/COA issues
  • Title insurance claims and coverage
  • Title reformation actions

Understanding the nature of title claims, title litigation, and holding title insurers accountable is a premier attribute our attorneys give to our clients throughout the industry.

Title and Title Insurance
With our years of title experience as underwriters and approved title agents, Kelley Kronenberg attorneys represent lenders, investors, and mortgage servicers in all matters related to title defects and encumbrances to ensure our clients’ security interests remain viable and lasting.

Our Client-Centric Approach

At Kelley Kronenberg, exceptional client service and rapid response times are our hallmarks. When you choose us for your real estate transactions, you can trust that you’ll receive the highest level of expertise and communication throughout the process.