CEDAR RAPIDS, Iowa-Starting today, purchasing a new home in Iowa could lead to higher expenses due to a newly implemented state law. As per the law, buyers will need to allocate additional funds towards their home purchase.
Matt Ford from Skogman Reality explained that in the state of Iowa, it is mandatory for real estate agents to provide clients with a specific document when showing them homes.
Previously, it was customary for the buyer to negotiate and pay the real estate agent’s fee through the listing broker. However, a recent law has revised this practice, shifting the responsibility of paying the fee to a different party.
According to Ford, buyers are now responsible for compensating their agents for the services rendered.
According to Matt Ford, a representative from Skogman Realty, the root of this issue can be traced back to a group of sellers who filed a lawsuit against real estate companies in Missouri.
According to him, it is important for buyers to comprehend that the new law links them with a specific agent for a designated period of time within a certain geographic region.
According to Ford, purchasing a property listed as “For Sale By Owner” may result in being responsible for the commission fee if another agent is involved in the transaction. He advises that signing multiple agreements with different agents may lead to a potential obligation to pay two commissions.
It’s important to remember that the commission is something that can be negotiated.
According to Laura Holmes, the owner of FSBO Homes, buyers should keep in mind that the contract they sign with a buyer’s agent is negotiable. She advises that just because something is stated in the contract, it doesn’t mean that it is mandatory to sign it.
According to Ford, the complete effect of the new law, which was a result of a class action lawsuit filed by home sellers, will take a few years to be witnessed.
For individuals who are currently in the market for purchasing a home, Ford advises to ensure that you are aware of the new process.
He said that although change can be difficult and it may take some time for individuals to adapt to the new normal, it is still achievable and any competent licensed real estate agent who has undergone training on this new method of conducting business can effectively explain it to their clients.