Why you shouldn’t use Zillow’s new Touring Agreement when buying in Ocean City Md.
As we sit down and write this, the industry of Real Estate is under more changes than we have seen in quite some time. As all of us Realtors know, change is inevitable in our industry. Change can be scary, BUT it can also lead to new opportunities. In our unique Ocean City Maryland Real Estate market, change doesn’t always affect us in the same way (and in the same timing) that it affects Realtors nationwide. Here’s a perfect example - Let’s look at Zillow’s introduction of Non-Exclusive Touring Agreements in response to the recent NAR settlement - which requires buyers and buyers-agents to have signed written agreements prior to showing properties. Today, we’re going to dive into how and why Zillow’s proposal has already been shot down by the Maryland Association of Realtors; and why we applaud Maryland for their position on this (as Realtors and Consumers). But before we do, here’s a quick reminder and disclosure that all thoughts and comments below are simply our opinions. We’re not legal experts and encourage you to do more research if you have any questions.
Here’s what you need to know about Zillow’s proposed ‘Non-Exclusive Touring Agreements’: Zillow’s Non-Exclusive Touring Agreement is essentially an agreement between a Zillow Agent (aka, an agent that pays Zillow a lot of money to be handed Zillow leads) and a prospective buyer that’s been perusing Zillow. Their new policy states that these two parties can enter into a “Touring Agreement,” which is essentially a non-binding agreement that allows the Buyer to work with this “Zillow Preferred Agent” with no strings attached, for up to 7-days. This agreement may sound like a nifty loophole to the new NAR (National Association of Realtors) policy, as it appears to give the Buyer a ‘trial’ period to see if they ‘like’ their agent. Even more enticing to the consumer, this Zillow Touring agreement does not require compensation or exclusivity…. With Zillow Group quoted as saying that “not requiring compensation or exclusivity is ‘by design,’ and that they believe any negotiation of compensation, and what it will look like for the buyer and agent to work together, should happen after they both meet and feel ready.” (Source).
The Maryland Association of Realtors has reviewed, and since voiced concerns regarding this new touring agreement created by Zillow. They have, in fact, stated that the Touring Agreement in its current form is non-compliant with Maryland Law. Maryland, our beloved home state, of which all of its residents are proud to reside in (couldn’t you tell, practically every one of us has at least 1 item of clothing with our state flag), is one of the few states that has operated with formal Buyers Agency Agreements FOR YEARS. Furthermore, according to the Maryland Brokers act, showing a potential buyer a home is a service that constitutes “providing brokerage services,” which necessitates a written “brokerage agreement” establishing a “brokerage relationship” (Source). In short, Maryland is saying that our state has already had Agency Laws in place for years that work to protect the consumer. They further explain that if a potential buyer does in fact choose to NOT sign a brokerage agreement, the agent showing them properties therefore represents the SELLER. Back up. No seriously, back up. Read that again! If you’re a buyer and you are working with a real estate agent, and you don’t sign a formal Buyers Agency Agreement with that agent, then that agent legally represents the SELLER! (Zillow Touring Agreement or not). Meaning anything you tell that Agent (who is not YOUR agent), is not confidential and should be shared by that agent with the SELLER.
Simply put, the Maryland Association of Realtors is trying to protect YOU, the consumer (the BUYER) by pointing out that Zillow’s new non-exclusive touring agreement fails to meet the criteria of a brokerage agreement under Maryland law. Since the agreement does not establish an agency relationship between the buyer and the broker, it means the buyer is not a client, and the agent who is showing them properties does not owe them any fiduciary duties. The Maryland Association of Realtors believes that the lack of clear representation undermines the disclosure requirements of the Maryland Brokers Act and could result in non-compliance with Maryland law, along with confused Buyers. As a part of their response, the Maryland Association of Realtors reminds all agents to establish WRITTEN buyer’s agency agreements that are consistent with Maryland law as well as the NAR settlement agreement, BEFORE working with a Buyer’s Agent to see a property.
Zillow’s introduction of their new non-exclusive touring agreement has, of course, sparked debate within the industry. While it may aim, on the surface, to put consumers first, it is crucial for Buyers to understand the true implications of Maryland’s laws and how this Zillow loophole will potentially work against them (and certainly not for them). This is especially true in our market here in Ocean City. So please remember, adhere to state laws, and ask before you act! Talk to a great local Realtor, ask lots of questions, and don’t do anything until you’re satisfied, you’re working with someone who is going to work hard for YOU. Someone who you’re confident in, and who has the experience, knowledge, and passion to help you with your real estate needs.
Why is this more important “NOW” than ever? Because there are TONS of changes occurring the Real Estate industry…. and that is without even mentioning new Condo Laws in Maryland which are dramatically changing our small real estate bubble in Ocean City, Maryland. Considering all of these changes and new laws, we cannot think of a better reason to make sure that EVERY buyer is working with a great, LOCAL, real estate expert. When you’re looking for the top real estate agents in Ocean City or searching for Ocean City Maryland condos for sale, always remember the importance of transparency, communication, experience, and knowledge. It’s not just about finding the #1 Listing Agent in OCMD, or the best realtor in Ocean City, Maryland; it’s about finding someone who prioritizes your interests and knows as well as understands the rules and laws of our industry. Thanks so much for reading, and if you have any questions, please feel free to reach out! *If nothing else, hopefully you’ll at least remember this one final comment, to help you in any real estate search. Don’t use Zillow to schedule a property tour or showing… Ever. You don’t know who you’ll be working with, or how experienced they are. What you can be certain of is, the agent you get connected with paid Zillow a lot of money to get your lead. Read that again and think it through…. Zillow got money to share your contact information with an agent that had to meet no other qualifications than to offer Zillow money. So do 30-seconds of due-diligence. Find a great local Realtor. Call your Agent friends at home, ask them who they know or if they can refer you to someone. Speaking of great, local Agents with a ton of knowledge and a passionate desire to work with new buyers (like you) …. If you’re looking to buy or sell a home or condo in Ocean City (and the surrounding resort areas) I encourage you to give me or my business partner a call. You can reach us at either of the numbers below:
Grant Fritschle- (410) 430-5880
Jon Barker- (410) 935-3810
*Never hesitate to reach out to our partner company Central Reservations, for all your Vacation Rental Needs at the beach. www.CentralOC.com