In real estate, it’s all about location, location, location – but when it comes to legislative advocacy, timing is everything.
On March 11th, Indiana Governor Eric Holcomb signed a state-level requirement for buyer agency agreements into law – a top legislative priority of the Indiana Association of REALTORS® that represented more than two years of leadership discussion, member engagement and education, and outreach to policymakers.
The timing of the new state law gave Indiana REALTORS® a head start on preparing for NAR’s proposed seller commission lawsuit settlement and ensured that all licensed real estate brokers across the state would operate by the same standard for consumer protection and transparency.
Said Maggie McShane, IAR’s Senior Vice President of Government Affairs, “IAR has encouraged our members for years to use buyer agency agreements to provide clarity on broker compensation, educate homebuyers on the value REALTORS® provide and ensure they understand the professional responsibilities of their broker in writing – the national litigation prompted us to pursue a consistent state requirement for written agreements for listing and buyer representation agreements.
“The ink had hardly dried on House Enrolled Act 1068 before the proposed NAR settlement shifted the industry in this direction,” McShane added.
HEA1068 began as a straightforward bill intended to provide transparency and disclosures to homeowners who might be swayed by below-market cash offers from unscrupulous, unlicensed ‘wholesalers.’ The bill’s author, Indiana Representative Edward Clere (himself a REALTOR®) recognized the opportunity to add critical consumer protections for buyers, as well, by accepting the written buyer agreement requirement as an early amendment.
IAR advocated for this amendment covering all licensed real estate practitioners representing buyers. “This is a basic consumer-protection issue, and it protects the broker, too,” asserts McShane. “Professional representation is crucial for homebuyers navigating a complex and challenging market and has value beyond a field in an MLS listing.”
The new legislation solidifies the relationship between the buyer and the agent, spelling out the terms of the working relationship. “It’s a normal practice in other professions, that relationships should be documented in writing,” says McShane. “For the consumer, it helps them to understand the legal ‘agency’ duties of the broker and how they are paid; for brokers, even if it represents a change in business practices, this is a big step towards ensuring they are fairly compensated for their expertise and hard work as these negotiations move beyond the MLS.”
Many legislators wanted to help the industry move forward, reports McShane: the bill, which will go into effect on July 1st, received unanimous support from both houses of Indiana’s General Assembly. “Any new business requirement is scrutinized in a state like Indiana, so we’re pleased by the bipartisan consensus for real estate consumers and brokers,” she noted, adding, “We were able to achieve this in large part because years of member advocacy, RPAC support and relationship-building gave us a seat at the table as the trusted voice of the industry and its consumers. We had the credibility and goodwill to work with Representative Clere and his colleagues to make this happen.”
To learn more about how the Indiana Association of REALTORS® is working to protect consumers and professionals in the real estate industry, contact Maggie McShane, Senior Vice President of Government Affairs, at mmcshane@indianarealtors.com or 317.408.3896. For more information on buyer broker agreements visit NAR’s Window to the Law: The Benefits of Using a Buyer Representation Agreement.
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