You and your seller need to sign an addendum to your listing agreement, that complies with the new settlement, and refers to compensation sharing without the MLS. Use the new UAR form “ADDENDUM TO EXCLUSIVE RIGHT TO SELL LISTING AGREEMENT & AGENCY DISCLOSURE”
You and your byer need to sign an addendum to your listing agreement, that complies with the new settlement, and refers to the compensation sharing without the MLS. Use the new UAR form “ADDENDUM TO EXCLUSIVE BUYER BROKER AGREEMENT & AGENCY DISCLOSURE”
Starting August 14th, use the new “EXCLUSIVE RIGHT TO SELL LISTING AGREEMENT & AGENCY DISCLOSURE” which incorporates the new legal language to protect you and your clients.
Starting August 14th, use the new “EXCLUSIVE BUYER-BROKER AGREEMENT & AGENCY DISCLOSURE” which incorporates the new legal language to protect you and your clients.
If you are already under contract, with the contract signed before August 14th, then the previous MLS commission sharing rules still apply to that transaction, and you will not need to sign any additional addenda. You can complete that transaction the same way as was done previously.
You can have the buyer pay you directly, or you can have the buyer include an addendum to their offer to the seller, that asks the seller to pay the buyer’s broker directly. You can use the UAR form “REAL ESTATE BROKERAGE PAYMENT ADDENDUM TO REAL ESTATE PURCHASE CONTRACT”. Note that in this addendum, any payment listed will be IN ADDITION to any Brokerage Compensation Agreement between brokerages.
The settlement states that you cannot accept any more compensation than agreed to in the Buyer Broker agreement. Even if the seller agreed to offer a larger amount, you cannot accept it. If you are considering adding an addendum to the buyer broker agreement to increase that amount, you should consider your fiduciary duty of loyalty to your client, and consider what would be in their best interest.
The intent of the settlement is to prevent a market where buyers have difficulty negotiating commission for their agents, because the BAC is a standard rate, and also to prevent agents from steering their clients based on the BAC offered. With this in mind, any large repository of BAC offerings might be a potential violation of the settlement terms, so we likely shouldn’t list BAC on anything affiliated with the MLS, such as Aligned Showings, or other services directly linked to the MLS. We are allowed to advertise BAC on our own website and advertisements. We can link from our own advertisements that have BAC to the MLS, but we cannot link from the MLS to a website or post that lists the BAC.
No, the compensation agreed in the Buyer Broker Agreement with your client needs to have a clear compensation amount. It cannot be left vague, or “up to” an amount, it needs to be a clear number, or clearly calculable based on the transaction amount.
What if the Unrepresented Buyer asks the Seller’s Agent to provide comparables to justify the price?
The Seller’s Agent can only provide material information, or protect the interests of the Seller. The Seller’s Agent can show comparables that justify the listing price agreed to by the Seller. They cannot look for comparable properties to show an unrepresented buyer that would not support the seller’s position. They must maintain honesty, and confidentiality of the Seller’s information.
The Listing Agent cannot help the unrepresented buyer fill out the REPC or other forms related to the purchase contract, since they cannot give any advice to the buyer on those documents. They can direct them to sources to find the documents, but should be cautious not to imply to the buyer that they represent the buyer’s interests.
A Listing Agent already has permission to show the listed property from the seller, to any prospective buyer. They even have a duty to do so. They must be careful not to imply that they represent the interests of any buyer.
If an agent signs a showing agreement with a buyer, that does not include agency, then they must be clear with the buyer that they do not represent their interests, and they must maintain honesty. Agents should carefully consider the potential outcomes of showing property without agency, and any risks there might be for the seller or the seller’s property if they don’t fully vet the buyers that they choose to tour the homes.
The Listing Agent has duties of honesty, disclosure of material facts, and reasonable care to unrepresented buyers.
A Listing Agent cannot advise the unrepresented buyer on their course of action regarding due diligence items discovered during an inspection. Any advice could be against the best interests of their seller client. They should refer the buyer to get proper representation.
A Seller is served best by an agent that can offer and provide full loyalty. An agent that enters limited agency must fulling inform their seller that they will not have loyalty, disclosure, or obedience.
Agents in different markets have set different norms for showing property over the last 20 years. Many agents have shown properties without any agency agreement, or fiduciary, and not contract for payment of services.
The Department of Justice will be enforcing the settlement agreement. More important than that, is that each client and customer be treated honestly, and that all fiduciary responsibilities are performed properly. If this is done correctly, all agents will be in compliance with the settlement agreement.
The primary motivation for buyers to be unrepresented is to save on costs. An agent should help buyers to understand the nature of a real estate transaction, and the potential problems or mistakes that are common, or could arise, and the cost of those problems. Agents should also acknowledge that technology has made it easier than ever to facilitate a real estate transaction, and should be honest about the value that they provide and the services that they offer.
Yes, a seller can pay a buyer’s brokerage commission. A buyer can use the new “REAL ESTATE BROKERAGE PAYMENT ADDENDUM TO THE REAL ESTATE PURCHASE CONTRACT” to request that the seller pay part, or all of the buyer’s brokerage commission obligation. Note that in this addendum, any payment listed will be IN ADDITION to any Brokerage Compensation Agreement between brokerages.
An agent should have clear communication with their clients, and set expectations for what the agent will, and will not be able to do while they are on vacation. If the agent assigns another agent to help their clients while they are away, they should ensure that their Agency Agreement is clear about the responsibilities of the other agent filling in.
Yes, a seller’s agent can ask to see a Buyer Broker Agreement, however a Buyer’s Agent does not have any obligation to show that agreement to anyone that is not a party to that agreement. Seller’s agents and buyer’s agents should both be honest about what commission sharing agreements they are allowed to enter, with permission of their clients, and negotiate in good faith, for the best outcome for their clients.
Yes, a buyer’s agent can ask to see a Listing Agreement, however a seller’s agent does not have any obligation to show that agreement to anyone that is not a party to that agreement. Seller’s agents and buyer’s agents should both be honest about what commission sharing agreements they are allowed to enter, with permission of their clients, and negotiate in good faith, for the best outcome for their clients.
Title companies are hired to perform a service. If they want to ensure that they are complying with the agreements that have been signed, the easiest way would be for them to request copies of those agreements. This is not a requirement, but it can facilitate the correct handling of the transaction.
Clear cooperation requires that members of the MLS post their listings on the MLS within a reasonable time after the first advertisement. This is because it is believed that our clients are best served by giving their listings the widest possible exposure to potential buyers, and keeping listings in smaller groups or advertising channels would be a detriment to our clients. Now that the BAC cannot be advertised on the MLS, agents and brokers are looking at other ways to advertise their listings, but this does not change the value of listing the property on the MLS. Clients still deserve the widest possible exposure to get their listings in front of as many buyers as possible.
You can read or watch part 1 here:
You can read or watch part 2 here: