The California Association of Realtors had to re-write a few of their new forms in order to comply with the DOJ critique. These revised forms get released tomorrow, and they will probably help chart the final path for buyer-agents.
There are two noteworthy points in them.
1. The old listing agreement mentioned the full commission rate the seller would pay at closing, and then in a separate paragraph at the bottom of the same page, it listed how much of that full commission that would be paid to the buyer-agent. The second rate was determined by the listing agent with little if any involvement of the sellers.
The new listing agreement will dictate the commission rate the seller will pay at closing for seller representation only. There won’t be any mention of the seller paying the buyer-agent.
But there will be a second paragraph where the listing agent can add an additional fee for handling the extra work created if the buyer is unrepresented.
In summary: Agents who only use the basic listing agreement can completely ignore buyer-agents, and can also tack on an extra rate or fee for bringing in unrepresented buyers. It will encourage single agency, and buyers will really have to be committed to getting good help!
2. If the listing agent is committed to having their seller offer “concessions” to a buyer that may be used towards a buyer-agent commission, they will need to include a separate and optional form. The form will ask the seller if they want to offer concessions (Yes or No), and if so, how much do they want to offer.
Ed Zorn is the vice president and general counsel of CRMLS, the largest MLS in the state. When asked about the concessions amount, he said sellers should not ‘commit to any kind of number whatsoever.’ Our Compass management agrees.
To the ivory-tower folks, not offering a specific commission rate to buyer-agents sounds safe and compliant. But it will expedite the death march of the buyer-agent.
The listing agreement will be encouraging single agency and if a buyer-agent can find their way to the negotiating table, there won’t be any guarantee of the seller paying anything towards your commission.
Literally, there was a chance for this to all work itself out by using concessions to pay buyer-agents. But everyone is so nervous about future litigation that these revised forms will lead us down the path of eliminating the buyer-agents. Single agency is upon us!
