Changes are coming soon due to the National Association of Realtors (NAR) proposed settlement.

As of August 17, once an agent is “working with” a buyer, they must sign a new agreement before touring a home, including in-person and live virtual tours.  The written agreements must:

  • Include any provisions required by law;
  • State that they are fully negotiable;
  • Disclose the amount or rate of any compensation the broker will receive from any source;
  • Show that the amount must also be objectively ascertainable and not open-ended (for example “buyer broker compensation shall be whatever the amount the seller is offering to the buyer);
  • Include a statement that the broker may not receive compensation that exceeds the amount agreed to with the buyer from any source.

You may be wondering what is NOT being dictated by the NAR:

  • Type of relationship the broker has with the buyer;
  • Length or specific term of the agreement;
  • Exact services to be provided;
  • Type or amount of compensation.

Also consider the following when writing or updating buyer agreements:

  • Use an organized format with understandable terms and readable font;
  • Maximize choice by considering all types of buyer agreements, including short form, limited service, agency, non-agency, transaction, customer, among others;
  • Clearly state all services the broker will provide;
  • Disclose all consumer protection information, duties of confidentiality, Equal Housing Opportunity statement and other consumer notifications;
  • Negotiate term and extension provisions including addressing termination.

In addition to above, brokers and buyers may agree to a retainer fee and address whether it is included in total compensation, credited against it and/or refundable

  • Address how conflicts of interest would be resolved, such as representation of additional buyers on the same property, dual agency, designated agency or transaction brokerage;
  • Consider including dispute resolution such as mediation or arbitration.

Let our experts at PK Boston Law draft or review your agreement today!