Things to Know.

For Sellers:

• Listing Agreement: To work with an agent, a seller must sign a Listing Agreement, typically an Exclusive Right to Sell Agreement, which grants the agent the exclusive right to market and sell the home.
• Agency Disclosure: Agents must provide a Disclosure Regarding Real Estate Agency Relationships, explaining their fiduciary duties to the seller.
• Seller Disclosures: California law requires sellers to provide the Transfer Disclosure Statement (TDS) and Natural Hazard Disclosure (NHD) to buyers, revealing known issues with the property.

For Buyers:

• Buyer Broker Representative Agreement (BRA): Buyer is required to sign with this form as of January 01, 2025
• Dual Agency: In California, an agent can represent both the buyer and seller in a transaction (dual agency), but they must disclose this to both parties and remain neutral.
• Earnest Money Deposit (EMD): Buyers typically submit an EMD (1-3% of the purchase price), held in escrow, to show they are serious about the purchase.

Purpose:
A BRA is a legally binding contract between a prospective property buyer and a real estate agent, outlining the terms under which the agent will represent the buyer in purchasing real estate. This agreement specifies the scope of the agent’s services, compensation details, and the nature of the fiduciary relationship, ensuring that the agent acts in the best interest of the buyer.​

Recent Updates (as of 2025):
Effective January 1, 2025, California law mandates that all buyer’s agents enter into a written BRA with their clients before or at the time of making an offer on a property. This change aims to formalize the relationship and clarify expectations between buyers and their agents. ​

How They Work:
Upon signing a BRA, the agent commits to assisting the buyer in locating and negotiating the purchase of a property. The agreement details the services provided, the agent’s compensation (which may be a percentage of the purchase price or a fixed fee), and the duration of the contract.​

Duration:
The length of a BRA is negotiable but is typically set for a specific period, often ranging from three to six months. Notably, under the new California law, BRAs with individual buyers cannot exceed three months unless the buyer is a corporation, LLC, or partnership. ​Brownstein Hyatt Farber Schreck.

Termination:
A BRA can be terminated by mutual consent, completion of the purchase, or expiration of the agreement’s term. Additionally, if either party breaches the contract’s terms, the agreement may be terminated.​

Purpose:
A Listing Agreement is a contract between a property owner (seller) and a real estate agent, authorizing the agent to market and sell the property. This agreement outlines the terms of the agent’s authority, marketing strategies, commission structure, and other responsibilities, ensuring that both parties have a clear understanding of their obligations.​

How They Work:
Upon signing a Listing Agreement, the agent is granted the right to represent the seller in the sale of their property. The agent will typically conduct a market analysis to determine an appropriate listing price, develop marketing plans, schedule showings, and negotiate offers on behalf of the seller.​

Duration:
The term of a Listing Agreement is negotiable but commonly ranges from three to six months. The specific duration should align with market conditions and the seller’s objectives. ​Spyglass Realty+1Prevu | Get Cash Back+1.

Termination:
A Listing Agreement can be terminated upon mutual agreement, expiration of the contract term, or if the agent fails to fulfill their duties as outlined in the agreement. Some contracts may also include provisions for early termination, which could involve cancellation fees. ​Total SoCal Homes.

Conventional Loans:

• Require 5-20% down payment (though some allow as low as 3%).
• Need a credit score of 620 or higher.
• Private Mortgage Insurance (PMI) is required if putting down less than 20%.

FHA Loans (Government-backed for first-time buyers)

• Require a minimum 3.5% down payment.
• Accept credit scores as low as 580 (or 500 with a 10% down payment).
• Debt-to-income ratio (DTI) under 43% is preferred.

VA Loans (For eligible military service members and veterans)

• Require 0% down payment.
• No PMI required.
• Must have a Certificate of Eligibility (COE) and meet lender credit requirements.

USDA Loans (For rural and some suburban buyers)

• Require 0% down payment.
• Must buy in a USDA-eligible rural area.
• Need credit score of 640 or higher.

Jumbo Loans (For high-value homes)

• Used for homes exceeding $766,550 in most CA counties.
• Require at least 10-20% down payment.
• Need a credit score of 700+ and low DTI.

Buyers:

• Sign-in Sheets: Many agents request visitors to sign in; this does not commit a buyer to work with them.
• Representation: If you have an agent, inform the listing agent that you’re already represented to avoid conflicts.
• Asking Questions: Ask about the home’s history, recent renovations, seller motivations, and any known property issues.
• Taking Notes: Compare different properties, including location, price, and potential repair costs.

Sellers:

Sellers should prepare their homes by:

• Decluttering and staging: Making the home look inviting for buyers.
• Securing valuables: Since open houses allow strangers inside, it’s best to store away personal items.
• Leaving during the event: Buyers feel more comfortable exploring a home without the seller present.