In our continued effort to keep our members up to speed, this is part two of our coverage of the recent CRMLS Zoom call titled “Your New World: August 13th and Beyond.” We have highlighted key sections, and you can click here to view the entire PowerPoint presentation.
During the last update cycle, which began in June, 65 forms were either changed or created. These changes are crucial as they significantly impact your interaction with the multiple listing service. Let’s focus on the five key forms.
The first form of importance is the Residential Listing Agreement. It’s crucial to understand that there are NO fields for commission sharing in this updated version. The old RLA was structured around this process, where the seller specified the payment for the selling agent and could also offer a portion to the buyer’s agent side of the deal. However, this is no longer possible within any C.A.R. form. This change is of utmost importance and requires your immediate attention.
You need to recognize that the commission-sharing process within the C.A.R. form world is no longer available to you.
There are only fields for selling seller sites and only compensation, and this brings up some very, very important points.
The forms were rolled outing everyone with an opportunity to get trained on them. However, the new form, which does not allow for commission sharing, is now being used in deals. This re towards the end of July, provides some changes in the way you input the form into the multiple listing service.
There are no fields for commission sharing within the RLA. You need to input the listing into our system and include either a zero in the BAC or do not include compensation in the MLS altogether. There are also brokerages that are coming up with their own RLAs and Buyer Representation Agreements, but in the CAR world, there is no commission sharing within that platform of forms. So therefore, if you’re using the C.A.R. form, you use the new form, the one that was introduced on July 24th, and you had your seller basically fill that out and sign it on and go forward with a listing, you have to have ZERO in the Multiple Listing Service in the BAC field.
The other change to the residential listing agreement is that there are very specific, MLS-specific Provisions.
So the next question we always get is, “I had a listing that I input into the system, and it was signed underneath the old form. Obviously, the compensation offers are going away. What do I do?” C.A.R has created a new form called the Disclosure and Modification to the Listing Agreement. This takes the old listing agreement that you signed with your seller (prior to the July 24th change), and it helps bring it into the new world. It modifies the listing agreement that used to have the commission sharing on it, it modifies it for listings affected by the rule changes, and advises your sellers of the compensation rule changes. Basically, if you have an RLA effective prior to 8/13 for a listing that is in the following statuses: Active/ Coming Soon/ Withdrawn, or Hold, get the DMLA in front of your seller and have them sign it.
Or, if you have a listing that is under contract, active under contractor, or pending and potentially could revert to active after a DMLA and put it in front of your sellers.
The MLSA that I talked about addresses the MLS benefits and rules separate from the RLA. When you fill out a listing packet within zipFORMS, it is going to automatically provide that form to you, and it deals with MLS-specific issues such as clear cooperation, coming soon, concessions, and data photo privacy. Some, very important things that were part of the RLA that you need to be on top of are being able to communicate with your sellers as they move along through the process of selling their home.
Another change is that there is a requirement now that a BRBC (Buyer Representation and Broker Compensation Agreement) be signed. The BRBC is found in the C.A.R forms library. I know numerous brokerages are creating their own Buyer Representation Agreements. It is not a requirement that you use the C.A.R. forms. Not a requirement from the CRMLS standpoint that you use those forms, but I would highly recommend that if you are using something other than the standard forms that, you talk to your broker and or attorney that you’re utilizing them in the correct way and that they have the, the required elements that we do need to have in each one of those documents.
What does the BRBC form do? It specifies the terms of buyer agent representation and compensation. It is a clear, unequivocal definition of what a buyer’s agent communicates to a buyer of what they’re going to be paid through a deal. There are also some disclosures that need to be made. The BRBC is mandatory after August 13th within the CRMLS system, and it goes back to the CRMLS Rule 9.1 in the NAR settlement agreement that prior to showing, viewing, or touring a property that includes virtual touring with a buyer – you must have a signed agreement in place. You must have that in place prior to the touring process being started.
But there is an element of the RPA, the residential purchase agreement paragraph 3G3, that you need to check: that you’re including an SPBB form, which is the Seller Payment to Buyer Broker Form. Basically, buyer’s agents attach this form to ask the seller to pay all or part of the buyer’s contractual obligation to the buyer’s brokerage. A buyer broker form and basically, buyer’s agents attach this form to ask the seller to pay all or part of the buyer’s contractual obligation to the buyer’s brokerage.
People are going to learn some very expensive lessons over the next couple of months, and we’re trying to prevent that by giving you the tools and resources to ensure that your request for payment is in writing and done correctly. Remember, you have to make sure that you start the process of ensuring that your request and negotiated BRBC rate with your buyer get included in the offer through the process of an SPBB on the C.A.R. form site.
One of my favorite sayings is, “A man with experience is never at the mercy of a man with an argument.” This is pretty much the way commercial real estate operates, and Ed has done commercial training for a long period of time and can touch on that. It always happens with the residential agent who walks into a commercial deal and doesn’t realize that even though they were told the compensation was available, they didn’t ask for it in a deal and walked out of the deal without getting paid.
