Advice for working with a home buyer’s agent this spring

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By Holden Lewis | NerdWallet

If you’re in the market for a home, you might wonder how you’ll be affected by a class-action lawsuit involving real estate agents and commissions. On April 23, a judge granted preliminary approval to the settlement proposed in March by the National Association of Realtors, which means new rules are on track to go into effect in July or August.

None of which means you have to suspend your home search. Here’s what to know about working with a buyer’s agent this season.

What are the new rules?

In the lawsuit Burnett v. National Association of Realtors et al., a group of home sellers argued that NAR and some major real estate brokerages had enforced rules that effectively limited the sellers’ ability to negotiate on commissions. Sellers have traditionally set the commissions for the agents on both sides of the deal.

As part of the settlement, NAR promised to alter some business practices. The three main changes are:

Buyers, not sellers, will decide how much the buyer’s agent will be paid for a completed sale.
Commissions for buyer’s agents will no longer be listed on the multiple listing service, a database of properties for sale in a geographic area. Previously, MLS fields visible only to agents, but not consumers, specified what percentage commission sellers were offering for each property.
Your agent will be required to “enter into a written agreement” with you before giving you a tour of a home. While such contracts — often called buyer’s agency or buyer-broker agreements — are not new, there’s variation in how they’re implemented. Some states require them already. Some agents sign up buyers before showing properties, while others may explain the arrangement but not ask the buyer to sign anything until there’s a house to make an offer on.

These contracts will likely be mandatory by mid-July, and you can expect your agent to ask you to sign one sometime between now and then.

How much will a buyer’s agent cost me?

Your contract will specify how much your agent will be paid. For now, buyers and sellers are likely to travel the path of least resistance and pay the area’s customary commission. That’s 2.5% to 3% to each agent in most places.

But you probably won’t have to pay your agent out of pocket. In most cases, you should be able to add your agent’s compensation to your offer.

For example, let’s say you are paying your agent a 2.5% commission, and you make an offer on a $400,000 house. A 2.5% commission on $400,000 is $10,000. So you could offer the seller $410,000 on the condition that the seller pays your agent $10,000 at closing.

Fannie Mae, Freddie Mac and the Federal Housing Administration have indicated that they’re OK with offers that include compensation for the buyer’s agent.

That leaves out VA loans, which are mortgages guaranteed by the Department of Veterans Affairs. Buyers using VA loans aren’t permitted to pay real estate agents directly.

“Veterans are encouraged to negotiate with the seller, through the purchase offer, for the seller to pay for the buyer’s real estate agent or broker,” VA press secretary Terrence Hayes said via email.

That sounds like the VA is OK with offers that include the buyer’s agent’s commission, but that might not be the end of the story. The VA “is actively engaged with industry partners to establish flexible solutions that will ensure veterans maintain equal footing in the homebuying process,” Hayes said.

Can I save money by skipping the buyer’s agent?

Technically, you can buy a house without an agent representing you. But it’s not necessarily a money-saving hack, particularly for first-time home buyers.

Keep in mind that you’ll bargain with a listing agent who works in the interests of the seller. As you negotiate, you likely would benefit from the experience and support of an agent who represents your interests. Working with a buyer’s agent can save time and money.

Claudia Cobreiro, principal of Cobreiro Law in Coral Gables, Florida, advises: Don’t buy a house without being represented by a real estate agent or a lawyer. “I make so much money getting people out of crappy situations on contracts,” she says.

Hiring a buyer’s agent

What if you sign with a buyer’s agent, only to find that you don’t get along? The good news is that there’s leeway in the requirement for a written agreement.

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Danielle Rownin, a real estate agent with Keller Williams Realty in Connecticut, says she gives prospective clients options. “Option one is we could just sign the agreement just for today,” she says. If there’s a mismatch, the contract expires at midnight “and we’re free to move on.”

Chuck Vander Stelt, a real estate agent in Valparaiso, Indiana, advised starting out with a 30-day contract, which can be extended. “Home buyers should have an easy route to terminate the agreement while still in the looking-for-the-home stage,” he said via email.

You should treat the initial discussion with a prospective buyer’s agent as a job interview.

A seasoned agent is likely to deliver a prepared presentation. Rownin says her pitch to buyers lasts about an hour. “I take them through every single step of the transaction, what’s to be expected and what the next steps are — before we even step foot in the house,” she says.

Victoria Ray Henderson, owner and broker of HomeBuyer Brokerage in Bethesda, Maryland, said it’s important to ask if the agent works for sellers, too. Is it possible that the agent will want to represent both you and one of their seller clients? What if your agent and the seller’s agent work for the same brokerage? Both situations could entail conflicts of interest.

Henderson is an exclusive buyer’s agent, which means she and her brokerage represent only buyers. She said this guarantees “100% loyalty” because she and her company don’t have split allegiances.

Does it matter whether the agent is a Realtor?

You can choose the best real estate agent for you, regardless of which professional organizations they’re affiliated with.

Most, but not all, real estate agents are designated Realtors, which means they belong to the National Association of Realtors, the largest real estate trade association, and are expected to abide by NAR’s standards and code of ethics. Even non-Realtor agents will be affected by the settlement, because the agreement sets rules for any agent with access to the MLS, whether or not they belong to NAR.

Hurry up, or wait, or what?

Don’t let the proposed rule changes dictate the timing of your home purchase. Buyers who are ready should move ahead with the steps toward buying a home.

“The settlement isn’t necessarily what should be driving a home buyer’s decision,” says Ryan McLaughlin, CEO of the Northern Virginia Association of Realtors. “It’s really their life circumstances that should be driving their decision.”

McLaughlin’s advice reflects the consensus among real estate agents: Take care of your needs on your own timetable. After all, no one knows if a last-minute hitch will delay implementation of the new rules. “It’s business as usual until it’s not,” Rownin says.

 

Holden Lewis writes for NerdWallet. Email: hlewis@nerdwallet.com. Twitter: @HoldenL.

Travel: Brazil’s Afrotourism push is better late than never

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By Lebawit Lily Girma, Bloomberg News

Rhonda Holder’s first visit to Brazil came from a desire to see Rio de Janeiro’s world-famous Copacabana Beach, Christ the Redeemer statue and colorful Selarón steps. The 67-year-old retired Air Force lieutenant colonel and nurse from Hampton, Virginia, had stumbled upon a Facebook ad from Travel Divas, a company offering luxury group tours for Black women. They seemed to be having a ball, she says, and she felt she could relate to them.

After booking her spot on a March trip, Holder searched for activities to add to her itinerary and found a “Rio Little Africa” tour listed on TripAdvisor Inc.’s online tour marketplace, Viator, offered by Florencios Tours & Travel. Named after the central Port Zone known for its large Afro-Brazilian population, less than nine miles north of Copacabana Beach, it promised a deep dive into the city’s lesser-known African heritage and its ties to the transatlantic slave trade through a four-hour walking tour.

Intrigued, Holder suggested it to her group of 32 Black women, most of whom signed up. “Wherever we travel, we want to know the Black history behind it,” she says, speaking of Black consumers.

And the Brazilian government has finally caught on. A new concerted push to acknowledge, celebrate, preserve and promote Afro-Brazilian history and experiences is a first in the country’s history. It’s poised to become a revenue stream as well as bring change to an industry in which Afro-Brazilian tour guides have largely been left out. Heritage travel can be a catalyst to build a more equitable and inclusive country where inequality runs deep.

Consider that in the U.S. alone, Black consumers spent an estimated $109 billion on travel in 2019, the most recent research available, representing 13% of the country’s leisure market, according to global market research firm MMGY Global. And in 2023, U.S. tourists — Brazil’s most important long-haul market — spent $6.9 billion, surpassing the prior record of $6.8 billion in tourism revenue in 2014, when the country hosted the FIFA World Cup.

Marcelo Freixo, president of Brazil’s tourism board Embratur, said in January that the emerging travel sector stands to be a “big business” that can generate jobs and income and “empower Black entrepreneurs,” even if specifics are still fuzzy. Embratur has only just begun researching possible visitor numbers and revenue impact for those seeking out Brazil’s African heritage. But for a country where 56% of people identify as Black and where its most well-known elements, including samba and carnival, are rooted in its Afro-Brazilian heritage, late is better than never.

“The Brazilian government has realized it can attract more tourists when they sell Brazil through its Black culture,” says Guilherme Soares Dias, a journalist and founder of Guia Negro, an Afrotourism-focused platform that also sells Black heritage tours in Brazil.

Multiple efforts are now underway to expand Brazil’s Black heritage experiences under the auspices of a newly created government organization called Rotas Negras (“Black Routes”). Its coordinator, Tania Neres, argues that supervision from a federal level will ensure Afro and Indigenous tourism will no longer be pushed aside.

“People who have been trying to promote Afrotourism routes have had to deal with pushback for many years,” she explains, citing racism. There’s the prior government’s preference for marketing to White American or European tourists, with the notion that they would spend more. The hospitality industry, which lacks Afro-Brazilians in leadership roles, prioritized offering experiences they felt would speak more to that visitor demographic.

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Among Rotas Negras’ tasks is to map all of Brazil’s Black heritage tour offerings, entrepreneurs and businesses, which will also be added to existing travel booking app Diaspora Black, and to create a strategic plan for promoting Afro-Brazilian tourism overseas. A partnership with Airbnb Inc. to boost Afrotourism in Rio kicked off in December, and the tourism board campaign in February featured a Black female enjoying Afrotourism destinations in Brazil.

Separately, Embratur plans to create Afro-Brazilian tour itineraries in São Paulo, Alagoas, Maranhão, Bahia and Rio de Janeiro, Neres says, which will be available to travelers by the end of the year. A parallel benefit: Black Brazilians have been more openly embracing their history and identity in recent years and booking tours to learn what they didn’t in school.

Holder says she found the Rio Little Africa tour extremely moving; it reminded her of elementary school visits to Jamestown, where slavery began in the U.S. “It finally clicked that the Africans who were in the U.S. came from Brazil … they landed in Jamestown settlement.”

Gavin Huntley-Fenner, a 59-year-old African American scientist based in California, was intent on incorporating Afro-Brazilian history into his luxury cruise to the Amazon River in February, with stops in Rio and Salvador. His first trip to Brazil was 30 years ago while on business in São Paolo. “Black Lives Matter, you grow older, you learn more,” he says.

Finding a Black guide in Rio online proved easier for him than for Salvador, despite its largely Black population. When he requested one from the cruise line, which Huntley-Fenner declined to name, the response, he says, was, “We don’t have any Black tour guides.”

He eventually got connected to Nilzete Santos, founder of Afrotours. A full day of exploration in Salvador started with an introduction to candomblé, an enduring syncretic religion practiced in slavery times; a tour of hilltop-dwellings-turned-shrines at Ile Axe, where runaway enslaved Africans took refuge; and history at a Black-founded bank, which was created to help enslaved people buy their way out.

“It was really inspiring,” says Huntley-Fenner, reminding him of the resilience of Black people in particular. “In a way it’s a lot like the United States’ Black history, where on one hand it’s horrible and on the other hand, Black people have played a role in moving the country forward from its roots.”

Jamel Anderson, a 39-year-old fireman who hails from Harlem and the Bronx, New York, says it was easy to adapt culturally on his first trip to Brazil in July. It had been his lifelong dream to visit since he began practicing capoeira when he was 14 years old. He went with a list of things to do from New York-based Virtuoso travel adviser Mayla Melo. In Pelhourino, a historic neighborhood in Salvador, the colorful streets brought back childhood memories of Harlem’s buzzy blocks lined with vendors.

In Rio, he signed up for the Salgueiro samba school’s rehearsal, which is similar to a full-on carnival show. Anderson says the similarity was striking with the Battle of the Bands at historically Black colleges and universities in the South. “It’s hard to put into words,” he says, “but it felt like a home away from home for me.”

Ultimately, tackling centuries of inequality and discrimination through tourism will require innovation to empower Afro-Brazilians as business owners and executives.

In that aspect, Brazil also bears similarities with the U.S., where African Americans make up just 2% of executives in hospitality as of 2021 and less than 2% of hotel owners, according to the National Association of Black Hotel Owners, Operators and Developers. “It’s a process — you can’t always find, for example, a Black owner, a Black guide, a Black-owned shop,” says Soares Dias, the Guia Negro founder. “And there’s still discrimination in hotels, in airports, as well— we can’t forget this.”

©2024 Bloomberg L.P. Visit bloomberg.com. Distributed by Tribune Content Agency, LLC.

Victims of fatal crash in Wyoming, Minn., identified

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Police have identified the two people who died Friday morning in a two-car crash in Wyoming, Minn.

Debbra Pojanowski, 62, of Lindstrom, and Jerry Mely, 76, of Chisago City, both died in ambulances en route to Regions Hospital in St. Paul, said Wyoming Police Chief Neil Bauer.

The crash occurred around 11 a.m. Friday when a 2020 Honda CRV, driven by a 63-year-old Lindstrom man, traveling northwest on Pioneer Road near Iris Avenue, crossed the centerline into the oncoming lane, striking a 2018 Dodge Caravan, Bauer said.

The driver of the Honda CRV, who has not yet been identified, fell asleep and failed to navigate a curve, Bauer said. He drove head on into the Dodge Caravan, which was traveling southeast, he said.

Pojanowski was a passenger in the Honda CRV, and Mely was a passenger in the Dodge Caravan. Mely was not wearing a seatbelt, Bauer said.

Both drivers were injured and were taken by ambulance to Regions Hospital, he said.

The crash remains under investigation by the Wyoming Police Department and the Minnesota State Patrol.

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Forest Lake track athletes injured in car crash both expected to make full recoveries, officials say

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The two Forest Lake Area High School students injured Tuesday when they were struck by a car on U.S. Highway 61 are expected to make full recoveries, school officials said Thursday.

Jase Blanchard and Samuel Farinella, both 15 and both of Forest Lake, are recuperating at Regions Hospital in St. Paul, officials said.

“We are relieved to share that the two Forest Lake Area High School students who were struck by a car on Tuesday are currently recuperating at the hospital and are expected to make a full recovery,” school officials said Thursday, adding that the families of the boys have declined media interviews at this time “while they focus on (the boys’) healing and recovery.”

The boys were crossing U.S. 61 in the crosswalk at 202nd Street North with other members of the Forest Lake Area High School track team about 3:30 p.m. Tuesday when they were struck by Robert L. Creager, 84, of Lindstrom, who was driving a 2001 Cadillac DeVille southbound on U.S. 61, according to the Minnesota State Patrol.

The boys’ injuries were so severe that they had to be flown by helicopter to Regions Hospital, officials said. Creager, the driver, suffered non-life threatening injuries as a result of the crash, according to the Minnesota State Patrol.

The crash remains under investigation.

Plans call for a stoplight to be erected at the intersection of U.S. Highway 61 and 202nd Street, also known as Washington County Road 50, when funding becomes available, county officials said.

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