CHM Blog

A new day in real estate

Winds of change are making their way through the real estate industry as a groundbreaking set of rules governing how most real estate professionals conduct business in the US officially recently took effect. These changes, agreed to by the National Association of Realtors (NAR) as part of a $418 million settlement, are designed to transform the way Realtors get paid and who pays them, marking the largest change to the organization's rules in at least a generation.

As reported by CNN’s Samantha Delouya, Kevin Sears, NAR's president, emphasized the positive impact of these changes: "These new rules help to further empower consumers with clarity and choice when buying and selling a home. I am confident in our members' abilities to prepare for and embrace this evolution of our industry and help to guide consumers in the new landscape."

The first of these big changes affects commission transparency. Seller's agents will no longer advertise commission fees to buyers' agents on multiple listing services — changes that aim to prevent "steering" and ensure that homes are shown based on client criteria rather than commission rates.

Delouya explains how the second change deals with buyer representation agreements, saying that buyers must now sign a legally binding representation agreement with their agent before touring homes. This agreement informs buyers about agent compensation and emphasizes that commissions are fully negotiable. Along with that comes commission caps — specifying that a buyer's agent cannot receive more compensation than initially agreed upon, even if a seller offers more.

These changes underscore the invaluable role of Realtors in navigating the complex real estate landscape. As trusted advisors, Realtors are now better positioned to provide transparent, client-focused services that align with the best interests of buyers and sellers alike.

Many brokerages are already adapting to these new rules by creating flexible, short-term contracts to help buyers feel more comfortable. They simply want consumers and agents to have the least amount of friction going forward. As for long-term benefits, experts believe these changes will ultimately benefit consumers. The new rules are expected to foster a more competitive market, potentially leading to more diverse service offerings and pricing structures.

As the real estate industry adapts to these new rules, the true value of professional Realtors shines through. Their expertise, market knowledge, and ability to navigate complex transactions become even more crucial. Buyers and sellers can look forward to increased transparency, more negotiating power, and a real estate process that truly caters to their needs.

CNN, TBWS

How Rates Move:

Conventional and Government (FHA and VA) lenders set their rates based on the pricing of Mortgage-Backed Securities (MBS) which are traded in real time, all day in the bond market. This means rates or loan fees (mortgage pricing) moves throughout the day, being affected by a variety of economic or political events. When MBS pricing goes up, mortgage rates or pricing generally goes down. When they fall, mortgage pricing goes up. Tracking these securities real-time is critical. For more information about the rate market, contact me directly. I'm among few mortgage professionals who have access to live trading screens during market hours.

Rates Currently Trending: Neutral

Mortgage rates are moving sideways today. The MBS market improved by +14 bps last week. This was not enough to decrease mortgage rates or fees. The market experienced high volatility last week.

This Week's Rate Forecast: Neutral

Three Things: These are the three areas that have the greatest ability to impact rates this week. 1) The Fed, 2) Geopolitical and 3) Treasury Auction.

1) The Fed: The Federal Reserve will be the dominate force this week with the release of the Minutes from the last FOMC Meeting and Kansas City Federal Reserve's Jackson Hole Wyoming Economic Symposium that officially kicks off on Thursday. We will hear from Fed Chair Powell on Friday.

2) Geopolitical: The ramp up in Ukraine/Russia will have a lot of market attention as will Israel/Iran as any escalation will drive money into bonds.

3) Treasury Auction: We have an important 20Y Treasury bond auction on Wednesday.

This Week's Potential Volatility: High

This morning markets are stable. Volatility has started low but will increase on mid week news and potential geopolitical issues.

Bottom Line:

If you are looking for the risks and benefits of locking your interest rate in today or floating your loan rate, contact your mortgage professional to discuss it with them.

Richard Sardella has been actively managing and providing services in the mortgage industry for over 30 years. Richard serves on the board of directors as President of Colorado Home Mortgages Inc.

All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.

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