This week, we published seven updated forms and contracts to our Forms and Contracts Library. These forms are also available in the libraries of our e-signature partners such as DocuSign and Dotloop, and will be updated in MRED’s form library in four to six weeks. See below for details on what changes were made to each form.
Exclusive/Non-Exclusive Buyer-Broker Agreements and Exclusive/Non-Exclusive Tenant-Broker Agreements
Updates to the 4 buyer/tenant broker representation agreements include:
- Certain defined terms have been renamed, such as changing Acquisition Commission/Fee to Brokerage Commission/Fee, and a new definition of Brokerage Compensation has been added to refer to the collective of all agreed-upon compensation in the agreement.
- Clarification under exclusive agreements, that the buyer/tenant will work exclusively with their agent, regardless of whether a particular property is listed for sale or is new construction.
- Clarification that a buyer/tenant will inform their agent of any properties they wish to view, including on/off market properties, for sale by owner or new construction.
- Clarification that a buyer/tenant will conduct all their negotiations through their designated agent or attorney.
- Updated language around the180-day protection period following the termination of the agreement so that it aligns with the language as written in the Administrative Code.
- Requires that, in order for termination of the agreement to be effective, a buyer/tenant must pay any amounts owed to the brokerage rather than paying any money owed within 5 business days of termination.
The Spanish-translated copies of both the Exclusive and Non-Exclusive Buyer-Broker Agreements have also been updated to reflect the above changes.
For Sale/Rent by Owner Showing Agreement
This form has been updated to reflect post-settlement terms and language. This is now a showing agreement instead of a showing and compensation agreement. A buyer/tenant’s brokerage will already have in place a brokerage agreement with their client, which includes the amount of compensation the buyer/tenant has agreed to pay the brokerage.
Several new sections were added, such as a paragraph addressing the seller/landlord’s personal property and an indemnity paragraph.
The compensation paragraph was rewritten to mirror the language drafted in our listing agreement, which is an acknowledgement by the seller/landlord that they may receive an offer, whether for a purchase or lease, where the buyer/tenant is requesting that the seller/landlord contribute toward their brokerage compensation. That contribution amount, if any, is negotiable between the parties.
It is strongly advised that brokerages secure such showing agreements with for sale/rent by owners prior to entering a home, as it covers topics such as no agency, consent to show the property, seller’s responsibility to secure personal property, compensation, indemnity and dispute resolution, all of which help reduce risk and liability to the brokerage.
Dual Agency Forms
The two dual agency forms, Disclosure and Consent to Dual Agency and the Confirmation of Informed Consent to Dual Agency, have been updated to include a disclosure box at the top of the form that states the amount and how brokerage commissions are formulated are not set by law and are fully negotiable.
Check out our blog regarding the Do’s and Don’ts of Dual Agency for a refresher on how and when to use both of these forms.