Ivy signed the bill on Tuesday after passing the state Senate earlier this month. The bill was first introduced in early February. Alabama House of Representatives Randall Shedd (R-Cullman) is the representative of the state legislature.
It was previously known House Bill 230the law reaffirms Alabama’s existing Real Estate Consumer Agent and Disclosure Act (Recad) framework, focusing on early discussions of brokerage services and compensation, but prevents consumers from entering into contracts with agents early in their relationship.
The bill was supported Alabama Real Estate Association And it directly corresponds to Ministry of Justice (DOJ) Statement of Interest National Association of Realtors (NAR) Commission litigation settlement agreement. Under the terms of the NAR settlement, consumers must sign a buyer’s agent and buyer’s representative agreement before they can tour the property. There is nothing in the settlement that defines how long the contract is for, or whether it must apply to one or many properties. Despite the flexibility provided, DOJ still has problems with these contracts.
In an interesting statement, DOJ wrote that it believes the buyer broker agreement could “limit the way brokers compete with clients.”
“It is similar to previous restrictions between competitors that the court found in other cases to violate antitrust laws, and can be restricted rather than restricting buyer competition among buyer brokers,” the DOJ wrote in a statement of interest.
Alabama real estate agent takes the DOJ threat at face value and points to Jeremy Walker, CEO of the Trade Association. Capitol Journal In February, buyers may want to work with agents to find the property, but “they don’t want to be forced to sign a buyer contract anytime soon.”
“They want to know you before they say, ‘Hey, I want to work with you.’ And that’s what we want to do with that part right,” Walker added.
While some industry experts reflect Walker’s views on buyer broker contracts, others believe it is even greater responsibility to have the buyer sign the contract prior to their first home tour.
“Why the buyer’s contract is there — and the reason why NAR agreed to it and the lawyers pushed it forward was to remove the potential steering from the conversation.” NexthomeI said housingwire Early March. “If you have signed a buyer representative agreement with your agent and need to provide a summary of fees and services before viewing your home, you have agreed to the compensation rate before looking at the property, so there are no potential maneuvering issues.
“What Alabama lacks in this particular point is the fact that they are opening themselves up and members are looking for potential steering claims again. I think that’s a bad move.”
