REALTORS® Have Your Back In Times of Change

The real estate industry is vibrant and strong in Iowa. But it is also changing. 

Recent lawsuits and their pending settlements at the national level have propelled the state of Iowa real estate landscape to shift. You will likely notice these changes the next time you work with your trusted REALTOR®. 

That’s because REALTORS® are committed to protecting your investment through their comprehensive understanding of the real estate market and the intricacies of buying and selling homes. As trusted professionals, REALTORS® guide more than 86% of American homebuyers through the sometimes complex real estate process.

For those reasons, Iowa REALTORS® worked proactively with our members, stakeholders and legislators over the past year to implement changes that will bring more transparency to the real estate transaction.

As of July 1, all real estate licensees in the state of Iowa are now required by law to use a buyer agreement with clients. This mandate is part of the Real Estate Transparency Act, which passed the Iowa legislature unanimously and on a bipartisan basis. 

It’s important to know that buyer agreements have always existed, and many agents have used them for their entire careers. Recent industry changes have just made these agreements mandatory.

A buyer agreement is a binding contract between a buyer and a real estate agent that outlines the terms of their collaboration. It sets forth clear expectations of the relationship, the work the REALTOR® will perform, and an agreed upon compensation between the parties. 

We know the use of buyer agreements as a standard in the state is new, and that there may be some misconceptions about their use. Below we outline what you can expect when going through the homebuying process. 

• If you are a buyer working with a REALTOR® or other real estate licensee, you will need to have a buyer agreement signed with your agent before touring a property. 

• These agreements are required before a showing takes place. This includes in-person and live, virtual showings of properties. 

• These agreements do not have to be signed in order to attend an open house. 

• These agreements do not have to be signed in order to receive an automated email of available listings from your chosen REALTOR®. 

• Engage in open and thorough conversation with your chosen REALTOR® about their services and compensation. 

• Properties listed in a multiple listing service (also known as MLS) will no longer include an offer of compensation to a buyer’s agent starting in August. This is one reason that the portion of the buyer agreement around compensation is such an important discussion between you and your REALTOR®. Though cooperative compensation will no longer be shown on the MLS, it is still an option for sellers. 

• Remember that commission for home buyers and sellers has always been and continues to be an agreed upon decision between the parties. 

Though these changes may take a bit of getting used to, one thing that will never change is the dedication and expertise your REALTOR® will provide throughout what is probably the largest financial transaction of your life. 

Shaner Magalhães
2024 President 
Iowa Association of REALTORS®