Fred Glick, a Broker, Real Estate Realist, and Founder of Arrivva, holds a stellar track record with over $2 billion in residential transactions while grounded in a lifelong passion for real estate. Listen closely as Fred Glick gives you real estate hacks and tips through Arrivva’s AI Podcasters in the weekly We Fixed Real Estate podcast.
Arrivva is a comprehensive real estate and mortgage brokerage, catering to qualified motivated buyers, sellers, and mortgagees committed to brokering with love, integrity, knowledge, a well-defined plan, and a transparent flat fee structure. As featured in the Wall Street Journal, Arrivva leads the way in transforming the future of real estate, one happy client at a time.
Here’s a glimpse of what you’ll learn:
- Explore how AB-2992 is revolutionizing California’s real estate landscape
- Dive into the new law’s impact on buyer-broker agreements
- Discover the significance of clear, written contracts and how they protect buyers from hidden fees and informal deals
- See how the law addresses arbitration clauses
- Explore potential challenges and unintended consequences of AB-2992
- Learn how AB-2992 adapts real estate practices to the digital age
In this episode with Fred Glick
Fred Glick of Arrivva teams up with insightful AI guest hosts to uncover the game-changing details of California’s new AB-2992 law. This legislation promises to revolutionize buyer-agent agreements, making commission rates negotiable and mandating clear, written contracts.
But what does this mean for you as a homebuyer or agent? Will it simplify your experience or bring unexpected hurdles? Join us as we break down the pros, cons, and everything in between, so you’re equipped to navigate this new era in real estate with confidence. Don’t miss out on learning how AB-2992 could reshape your home-buying journey.
Resources mentioned in this episode
EPISODE TRANSCRIPT
[00:00:00] Fred Glick: San Francisco County, yes, the whole county, which is actually just the city has their own real estate contract because they have a separate association of realtors and they decided they wanted their own contract. So that being said, we’ve taken their contract. We’ve put it into both ChatGPT and then with the contract itself, put it into NotebookLM so they can come up with this podcast about the San Francisco contract, enjoy.
[00:00:28] AI Podcaster 1: All right, let’s dive into California real estate today. Specifically a brand new law, AB-2992. And this one could actually potentially save you thousands of dollars when you’re trying to buy your dream house out here.
[00:00:42] AI Podcaster 2: Oh yeah. It’s a big one. It’s really shaking things up both for buyers and for agents.
[00:00:47] AI Podcaster 1: So to break it down, I found this really great breakdown from CalMatters. They seem to be like on top of all things, California policy. It’s a nonprofit news organization.
[00:00:54] AI Podcaster 2: Yeah, they do great work. And this bill is all about the agreements. Between buyers and their real estate agents, you know, the folks who help you find the perfect place.
[00:01:03] AI Podcaster 1: Right, your buyer’s agent. But why? Why is there so much fuss?
[00:01:06] AI Podcaster 2: Yeah.
[00:01:06] AI Podcaster 1: About this specific agreement?
[00:01:08] AI Podcaster 2: Well, you see, for years now, it’s been pretty common knowledge that when sellers work with an agent, the commission rates are negotiable. But for buyer’s agents, that wasn’t always super clear. So AB-2992, it basically levels the playing field, and it requires that those buyer-broker agreements explicitly state that commissions are negotiable, just like they are for the seller side.
[00:01:29] AI Podcaster 1: Hold on. Are you telling me that this whole time I could have been negotiating my buyer’s agent’s fees?
[00:01:36] AI Podcaster 2: That’s the whole idea. It’s all about transparency, giving more power back to the buyer. I mean, imagine, just imagine shaving off even a few percentage points off that agent’s commission, that could mean thousands of dollars back in your pocket.
[00:01:51] AI Podcaster 1: Okay, now I see why this is kind of a big deal, but…
[00:01:54] AI Podcaster 2: Yeah.
[00:01:55] AI Podcaster 1: This whole commission thing, it feels like it’s like a secret, like nobody talks about it. So how would I even know, like how much to negotiate?
[00:02:01] AI Podcaster 2: That’s a really great question. That’s a concern that a lot of people have. And one thing that AB-2992 does is it mandate a written buyer-broker representation agreement. So no more of those like informal handshake deals. Got it. It’s got to be written down. It spells out everything. The agent’s duties, their responsibilities. And very importantly, it has to be signed before you even make an offer on a place.
[00:02:23] AI Podcaster 1: Okay, so it’s like a mini contract that protects both sides.
[00:02:26] AI Podcaster 2: Exactly. And this agreement, it can only last for three months. Unless you’re a company buying property and there’s no automatic renewals or anything, you have to actively choose to keep working with that agent.
[00:02:37] AI Podcaster 1: Okay, so everything’s laid out upfront.
No more feeling lost in a sea of paperwork.
[00:02:42] AI Podcaster 2: Yeah, and it gets better. So AB-2992 also reinforces existing disclosure requirements. So it makes sure that you, as the buyer, know exactly who your agent represents and what exactly they’re going to be doing for you. And all of this upfront clarity can help avoid a lot of those misunderstandings and potential conflicts down the road.
[00:03:01] AI Podcaster 1: Especially for first-time buyers. That can be a huge weight off your shoulders.
[00:03:05] AI Podcaster 2: Yeah.
[00:03:05] AI Podcaster 1: Speaking of avoiding confusion, this CalMatters breakdown mentioned something called an arbitration clause. And, uh, I don’t know about you, but that sounds a little…
[00:03:13] AI Podcaster 2: Imitating. It can be, which is why AB-2992 addresses it directly. So basically an arbitration clause means that if there’s any disputes between you and your agent, you have to settle it outside of court, through this process called arbitration. And now the law requires that. If your agreement includes that clause, it has to be explained very clearly, in plain language, no confusing legal jargon.
[00:03:39] AI Podcaster 1: Okay, so it’s all about making sure. That I know exactly what I’m getting into.
[00:03:43] AI Podcaster 2: Exactly. And whether you choose to work with an agent, who includes that arbitration clause or not, is a personal decision. Some people prefer it because it can be faster and less expensive than going to court.
[00:03:54] AI Podcaster 1: But it also means you’re giving up some of your rights. Like the right to a jury trial. So that’s something to think about.
[00:03:59] AI Podcaster 2: Absolutely, and this is where AB-2992 comes in. To make sure you have all the info. To make an educated choice. It’s all about protecting buyers. Creating a more transparent market.
[00:04:07] AI Podcaster 1: But does everybody think this is a good thing? I mean, more rules, more paperwork. Doesn’t that just make buying a house even more complicated?
[00:04:15] AI Podcaster 2: You know, that’s a really good point. Some people do argue that. Even though the intention is good, AB-2992 might add a little too much complexity, and maybe even slow down transactions. So we’ll explore those concerns and the potential impact on the California housing market.
[00:04:32] AI Podcaster 1: In the next part of our deep dive on AB-2992.
[00:04:36] AI Podcaster 2: Could all this extra paperwork and regulation actually make buying a house more of a headache?
[00:04:41] AI Podcaster 1: It’s a valid concern. Real estate transactions are already pretty expensive, pretty complex.
[00:04:45] AI Podcaster 2: Yeah.
[00:04:45] AI Podcaster 1: And some agents are worried that these changes could slow things down, maybe even like scare away some buyers.
[00:04:51] AI Podcaster 2: Instead of simplifying things. It might backfire.
[00:04:53] AI Podcaster 1: Right.
[00:04:53] AI Podcaster 2: And make the process more cumbersome.
[00:04:54] AI Podcaster 1: Exactly. And another worry is that this whole focus on negotiating commissions could create this like, race to the bottom.
You know agents feeling pressured to offer lower and lower fees.
[00:05:05] AI Podcaster 2: Yeah.
[00:05:06] AI Podcaster 1: Just to stay competitive. Well, that sounds good for me as a buyer. But wouldn’t that mean that they would have to cut corners somewhere to make up for that lost income?
[00:05:13] AI Podcaster 2: That’s exactly the fear that it could impact the quality of service that buyers receive.
[00:05:19] AI Podcaster 1: So instead of getting personalized attention and real expert guidance, I might end up with an agent who’s stretched too thin, can’t really dedicate the time or resources to my house hunt.
[00:05:34] AI Podcaster 2: Yeah, it’s a possible outcome. That’s what some people in the industry are worried about.
[00:05:40] AI Podcaster 1: So it’s like this tension between wanting buyers to have more power, more transparency, but also making sure that the quality of service doesn’t suffer.
It’s a tough balancing act.
[00:05:50] AI Podcaster 2: It is. And honestly, it’s still too early to tell what the long-term effects of AB-2992 will be. We’ll just have to see how it plays out.
[00:06:00] AI Podcaster 1: Well, that’s the nature of any big change. There’s always going to be those unintended consequences.
[00:06:04] AI Podcaster 2: Exactly. But that doesn’t mean we shouldn’t try to anticipate them.
And look at it from all angles. For example, remember how we talked about dual agents?
[00:06:12] AI Podcaster 1: Yeah, that’s where an agent represents both the buyer and the seller.
[00:06:16] AI Podcaster 2: Yeah.
[00:06:16] AI Podcaster 1: In the same transaction.
[00:06:17] AI Podcaster 2: That’s right. And while AB-2992 mostly focuses on those buyer-broker agreements, it does kind of raise some questions about how these new rules might affect dual agency situations.
[00:06:32] AI Podcaster 1: Like how does that requirement for a separate written buyer-broker agreement work if they’re already representing the seller?
[00:06:38] AI Podcaster 2: Exactly. You know, it could get kind of murky. We might need more clarification from the Department of Real Estate on how these situations work should be handled.
[00:06:46] AI Podcaster 1: Right. You don’t want either the buyer or the seller to feel like they’re being misled about who is actually representing them.
[00:06:53] AI Podcaster 2: Exactly. Transparency and clear communication are just so crucial in any real estate transaction, but especially when you have these dual agency relationships.
[00:07:01] AI Podcaster 1: So it sounds like AB-2992, it’s a step in the right direction.
[00:07:05] AI Podcaster 2: Yeah.
[00:07:05] AI Podcaster 1: But there’s still some details that need to be ironed out.
[00:07:08] AI Podcaster 2: Right. It’s a big change to California real estate.
And then it’ll be interesting to see how it all shakes out, but yeah, this brings up another interesting point about AB-2992 that I think our listeners will find interesting, the role of technology.
[00:07:24] AI Podcaster 1: Okay, how does technology fit into all of this? Technology, okay, so explain it to me. How does a law about real estate agents and their commissions relate to technology?
[00:07:35] AI Podcaster 2: Well, think about how we buy and sell homes today. I mean, it’s not just about open houses and those stacks of paper contracts anymore. We’ve got online platforms, virtual tours, e-signatures. Technology is like totally changing the game for real estate.
[00:07:49] AI Podcaster 1: Right. I can like practically tour a house from my couch these days.
So AB-2992, it’s kind of catching up with the times.
[00:07:55] AI Podcaster 2: You got it. The law actually has some stuff that talks about electronic signatures and digital disclosures. This is big because it acknowledges that all these digital tools are playing a bigger and bigger role.
[00:08:05] AI Podcaster 1: So instead of printing and signing and scanning all those documents…
[00:08:08] AI Podcaster 2: I can just put a button, basically. It makes things way more efficient for everybody.
[00:08:13] AI Podcaster 1: But there’s always a but right with technology. So what could go wrong with a digital signature?
[00:08:18] AI Podcaster 2: Security. That’s a big one. We want to make sure that all these electronic transactions are safe, secure, and most importantly, legally binding, tamper-proof technology, encryption, all that good stuff.
And AB-2992 actually addresses this. It sets some rules for those electronic signatures to protect both buyers and sellers.
[00:08:40] AI Podcaster 1: So it’s about embracing technology, but doing it in a smart way.
[00:08:44] AI Podcaster 2: Right. Safe, secure, and fair for everybody.
[00:08:47] AI Podcaster 1: I like it.
[00:08:48] AI Podcaster 2: And honestly, I think this is a good sign that California is trying to keep up with all the changes in the real estate world.
[00:08:54] AI Podcaster 1: Yeah, maybe we’ll all be buying virtual houses in the metaverse someday. Okay, but back to the real world for a second. We’ve covered a lot today. What are the big takeaways for our listeners out there who are trying to navigate this crazy California real estate market?
[00:09:07] AI Podcaster 2: I think the biggest thing to remember is knowledge is power.
AB-2992. It’s all about empowering you, the buyer. So take the time to understand your rights, don’t be afraid to negotiate, and read all those agreements really carefully before you sign anything.
[00:09:24] AI Podcaster 1: Exactly. No more handshake deals, and if something feels off, or you just don’t understand it. Ask questions.
[00:09:30] AI Podcaster 2: Yes. Buying or selling a home, it’s a huge decision. You deserve to feel good about it every step of the way.
[00:09:35] AI Podcaster 1: The more you know, the better choices you can make.
[00:09:38] AI Podcaster 2: Couldn’t have said it better myself.
[00:09:39] AI Podcaster 1: All right. So there you have it, folks. Our deep dive into AB-2992, a law that could change the game for California real estate.
[00:09:48] AI Podcaster 2: We hope you learned a lot and that you feel more confident now about navigating the market.
[00:09:53] AI Podcaster 1: As always, keep learning, keep researching, and happy house hunting, everybody.