DISCLOSUREREGARDING REALESTATEAGENCYRELATIONSHIP
(AsrequiredbytheCivilCode) (C.A.R.FormAD,Revised12/21)
(Ifchecked)ThisformisbeingprovidedinconnectionwithatransactionforaleaseholdinterestexceedingoneyearasperCivil Codesection2079.13(j),(k),and(l).
Whenyouenterintoadiscussionwitharealestateagentregardingarealestatetransaction,youshouldfromtheoutsetunderstand whattypeofagencyrelationshiporrepresentationyouwishtohavewiththeagentinthetransaction.
SELLER'SAGENT
ASeller'sagentunderalistingagreementwiththeSelleractsastheagentfortheSelleronly.ASeller'sagentorasubagentofthat agenthasthefollowingaffirmativeobligations:
TotheSeller:AFiduciarydutyofutmostcare,integrity,honestyandloyaltyindealingswiththeSeller.
TotheBuyerandtheSeller:
(a)Diligentexerciseofreasonableskillandcareinperformanceoftheagent'sduties.
(b)Adutyofhonestandfairdealingandgoodfaith.
(c)Adutytodiscloseallfactsknowntotheagentmateriallyaffectingthevalueordesirabilityofthepropertythatarenotknownto, orwithinthediligentattentionandobservationof,theparties.Anagentisnotobligatedtorevealtoeitherpartyanyconfidential informationobtainedfromtheotherpartythatdoesnotinvolvetheaffirmativedutiessetforthabove.
BUYER'SAGENT
ABuyer'sagentcan,withaBuyer'sconsent,agreetoactasagentfortheBuyeronly.Inthesesituations,theagentisnottheSeller's agent,evenifbyagreementtheagentmayreceivecompensationforservicesrendered,eitherinfullorinpartfromtheSeller.Anagent actingonlyforaBuyerhasthefollowingaffirmativeobligations:
TotheBuyer:Afiduciarydutyofutmostcare,integrity,honestyandloyaltyindealingswiththeBuyer.
TotheBuyerandtheSeller:
(a)Diligentexerciseofreasonableskillandcareinperformanceoftheagent'sduties.
(b)Adutyofhonestandfairdealingandgoodfaith.
(c)Adutytodiscloseallfactsknowntotheagentmateriallyaffectingthevalueordesirabilityofthepropertythatarenotknownto, orwithinthediligentattentionandobservationof,theparties.Anagentisnotobligatedtorevealtoeitherpartyanyconfidential informationobtainedfromtheotherpartythatdoesnotinvolvetheaffirmativedutiessetforthabove.
AGENTREPRESENTINGBOTHSELLERANDBUYER
Arealestateagent,eitheractingdirectlyorthroughoneormoresalespersonsandbrokerassociates,canlegallybetheagentofboth theSellerandtheBuyerinatransaction,butonlywiththeknowledgeandconsentofboththeSellerandtheBuyer.
Inadualagencysituation,theagenthasthefollowingaffirmativeobligationstoboththeSellerandtheBuyer:
(a)Afiduciarydutyofutmostcare,integrity,honestyandloyaltyinthedealingswitheithertheSellerortheBuyer.
(b)OtherdutiestotheSellerandtheBuyerasstatedaboveintheirrespectivesections.
InrepresentingbothSellerandBuyer,adualagentmaynot,withouttheexpresspermissionoftherespectiveparty,disclosetothe otherpartyconfidentialinformation,including,butnotlimitedto,factsrelatingtoeithertheBuyer'sorSeller'sfinancialposition, motivations,bargainingposition,orotherpersonalinformationthatmayimpactprice,includingtheSeller'swillingnesstoacceptaprice lessthanthelistingpriceortheBuyer'swillingnesstopayapricegreaterthanthepriceoffered.
SELLERANDBUYERRESPONSIBILITIES
Eitherthepurchaseagreementoraseparatedocumentwillcontainaconfirmationofwhichagentisrepresentingyouandwhetherthat agentisrepresentingyouexclusivelyinthetransactionoractingasadualagent.Pleasepayattentiontothatconfirmationtomakesure itaccuratelyreflectsyourunderstandingofyouragent'srole.
TheabovedutiesoftheagentinarealestatetransactiondonotrelieveaSellerorBuyerfromtheresponsibilitytoprotecthisorher owninterests.Youshouldcarefullyreadallagreementstoassurethattheyadequatelyexpressyourunderstandingofthetransaction.A realestateagentisapersonqualifiedtoadviseaboutrealestate.Iflegalortaxadviceisdesired,consultacompetentprofessional. IfyouareaBuyer,youhavethedutytoexercisereasonablecaretoprotectyourself,includingastothosefactsabouttheproperty whichareknowntoyouorwithinyourdiligentattentionandobservation.
BothSellersandBuyersshouldstronglyconsiderobtainingtaxadvicefromacompetentprofessionalbecausethefederalandstatetax consequencesofatransactioncanbecomplexandsubjecttochange.
Throughoutyourrealpropertytransactionyoumayreceivemorethanonedisclosureform,dependinguponthenumberofagents assistinginthetransaction.Thelawrequireseachagentwithwhomyouhavemorethanacasualrelationshiptopresentyouwiththis disclosureform.Youshouldreaditscontentseachtimeitispresentedtoyou,consideringtherelationshipbetweenyouandthereal estateagentinyourspecifictransaction. ThisdisclosureformincludestheprovisionsofSections2079.13to2079.24,inclusive, oftheCivilCodesetforthonpage2.Readitcarefully.I/WEACKNOWLEDGERECEIPTOFACOPYOFTHISDISCLOSURE ANDTHEPORTIONSOFTHECIVILCODEPRINTEDONTHESECONDPAGE.
Buyer Seller Landlord Tenant Date
Buyer Seller Landlord Tenant
CIVILSECTIONS2079.13-2079.24(2079.16APPEARSONTHEFRONT)
2079.13.AsusedinthissectionandSections2079.7and2079.14to2079.24,inclusive,thefollowingtermshavethefollowingmeanings: (a) “Agent”meansapersonactingunderprovisionsofTitle9(commencingwithSection2295)inarealpropertytransaction,and includesapersonwhoislicensedasarealestatebrokerunderChapter3(commencingwithSection10130)ofPart1ofDivision4 oftheBusinessandProfessionsCode,andunderwhoselicensealistingisexecutedoranoffertopurchaseisobtained.Theagent intherealpropertytransactionbearsresponsibilityforthatagent'ssalespersonsorbrokerassociateswhoperformasagentsofthe agent.Whenasalespersonorbrokerassociateowesadutytoanyprincipal,ortoanybuyerorsellerwhoisnotaprincipal,inareal propertytransaction,thatdutyisequivalenttothedutyowedtothatpartybythebrokerforwhomthesalespersonorbrokerassociate functions. (b) “Buyer”meansatransfereeinarealpropertytransaction,andincludesapersonwhoexecutesanoffertopurchasereal propertyfromasellerthroughanagent,orwhoseekstheservicesofanagentinmorethanacasual,transitory,orpreliminarymanner, withtheobjectofenteringintoarealpropertytransaction.“Buyer”includesavendeeorlesseeofrealproperty. (c) “Commercial realproperty”meansallrealpropertyinthestate,except(1)single-familyresidentialrealproperty,(2)dwellingunitsmadesubject toChapter2(commencingwithSection1940)ofTitle5,(3)amobilehome,asdefinedinSection798.3,(4)vacantland,or(5)a recreationalvehicle,asdefinedinSection799.29. (d) “Dualagent”meansanagentacting,eitherdirectlyorthroughasalesperson orbrokerassociate,asagentforboththesellerandthebuyerinarealpropertytransaction. (e) “Listingagreement”meansawritten contractbetweenasellerofrealpropertyandanagent,bywhichtheagenthasbeenauthorizedtoselltherealpropertyortofind orobtainabuyer,includingrenderingotherservicesforwhicharealestatelicenseisrequiredtothesellerpursuanttothetermsof theagreement. (f) “Seller'sagent”meansapersonwhohasobtainedalistingofrealpropertytoactasanagentforcompensation. (g) “Listingprice”istheamountexpressedindollarsspecifiedinthelistingforwhichtheselleriswillingtoselltherealpropertythroughthe seller'sagent. (h) “Offeringprice”istheamountexpressedindollarsspecifiedinanoffertopurchaseforwhichthebuyeriswillingtobuy therealproperty. (i) “Offertopurchase”meansawrittencontractexecutedbyabuyeractingthroughabuyer'sagentthatbecomesthe contractforthesaleoftherealpropertyuponacceptancebytheseller. (j) “Realproperty”meansanyestatespecifiedbysubdivision(1)or(2) ofSection761inproperty,andincludes(1)single-familyresidentialproperty,(2)multiunitresidentialpropertywithmorethanfourdwelling units,(3)commercialrealproperty,(4)vacantland,(5)agroundleasecoupledwithimprovements,or(6)amanufacturedhomeasdefined inSection18007oftheHealthandSafetyCode,oramobilehomeasdefinedinSection18008oftheHealthandSafetyCode,whenoffered forsaleorsoldthroughanagentpursuanttotheauthoritycontainedinSection10131.6oftheBusinessandProfessionsCode. (k) “Real propertytransaction”meansatransactionforthesaleofrealpropertyinwhichanagentisretainedbyabuyer,seller,orbothabuyerand sellertoactinthattransaction,andincludesalistingoranoffertopurchase. (l) “Single-familyresidentialproperty”or“single-familyresidential realproperty”meansanyofthefollowing:(1)Realpropertyimprovedwithonetofourdwellingunits,includingaleaseholdexceedingone year'sduration.(2)Aunitinaresidentialstockcooperative,condominium,orplannedunitdevelopment.(3)Amobilehomeormanufactured homewhenofferedforsaleorsoldthrougharealestatebrokerpursuanttoSection10131.6oftheBusinessandProfessionsCode. (m) “Sell,”“sale,”or“sold”referstoatransactionforthetransferofrealpropertyfromthesellertothebuyerandincludesexchangesof realpropertybetweenthesellerandbuyer,transactionsforthecreationofarealpropertysalescontractwithinthemeaningofSection 2985,andtransactionsforthecreationofaleaseholdexceedingoneyear'sduration. (n) “Seller”meansthetransferorinarealproperty transactionandincludesanownerwholistsrealpropertywithanagent,whetherornotatransferresults,orwhoreceivesanofferto purchaserealpropertyofwhichheorsheistheownerfromanagentonbehalfofanother.“Seller”includesbothavendorandalessorof realproperty. (o) “Buyer'sagent”meansanagentwhorepresentsabuyerinarealpropertytransaction. 2079.14. Aseller'sagentandbuyer'sagentshallprovidethesellerandbuyerinarealpropertytransactionwithacopyofthedisclosure formspecifiedinSection2079.16,andshallobtainasignedacknowledgmentofreceiptfromthatsellerandbuyer,exceptasprovided inSection2079.15,asfollows: (a) Theseller'sagent,ifany,shallprovidethedisclosureformtothesellerpriortoenteringintothelisting agreement. (b) Thebuyer'sagentshallprovidethedisclosureformtothebuyerassoonaspracticablepriortoexecutionofthebuyer's offertopurchase.Iftheoffertopurchaseisnotpreparedbythebuyer'sagent,thebuyer'sagentshallpresentthedisclosureformtothe buyernotlaterthanthenextbusinessdayafterreceivingtheoffertopurchasefromthebuyer. 2079.15. InanycircumstanceinwhichthesellerorbuyerrefusestosignanacknowledgmentofreceiptpursuanttoSection2079.14,the agentshallsetforth,sign,anddateawrittendeclarationofthefactsoftherefusal.
2079.16 ReproducedonPage1ofthisADform.
2079.17(a) Assoonaspracticable,thebuyer'sagentshalldisclosetothebuyerandsellerwhethertheagentisactingintherealproperty transactionasthebuyer'sagent,orasadualagentrepresentingboththebuyerandtheseller.Thisrelationshipshallbeconfirmedinthe contracttopurchaseandsellrealpropertyorinaseparatewritingexecutedoracknowledgedbytheseller,thebuyer,andthebuyer's agentpriortoorcoincidentwithexecutionofthatcontractbythebuyerandtheseller,respectively. (b) Assoonaspracticable,theseller's agentshalldisclosetothesellerwhethertheseller'sagentisactingintherealpropertytransactionastheseller'sagent,orasadual agentrepresentingboththebuyerandseller.Thisrelationshipshallbeconfirmedinthecontracttopurchaseandsellrealpropertyorin aseparatewritingexecutedoracknowledgedbythesellerandtheseller'sagentpriortoorcoincidentwiththeexecutionofthatcontract bytheseller.
CONFIRMATION: (c) Theconfirmationrequiredbysubdivisions(a)and(b)shallbeinthefollowingform:
Seller'sBrokerageFirmDONOTCOMPLETE.SAMPLEONLYLicenseNumber______________
Isthebrokerof(checkone): theseller;or boththebuyerandseller.(dualagent)
Seller'sAgentDONOTCOMPLETE.SAMPLEONLYLicenseNumber______________ Is(checkone): theSeller'sAgent.(salespersonorbrokerassociate) boththeBuyer'sandSeller'sAgent.(dualagent)
Buyer'sBrokerageFirmDONOTCOMPLETE.SAMPLEONLYLicenseNumber______________ Isthebrokerof(checkone): thebuyer;or boththebuyerandseller.(dualagent)
Buyer'sAgentDONOTCOMPLETE.SAMPLEONLYLicenseNumber______________ Is(checkone): theBuyer'sAgent.(salespersonorbrokerassociate) boththeBuyer'sandSeller'sAgent.(dualagent)
(d) ThedisclosuresandconfirmationrequiredbythissectionshallbeinadditiontothedisclosurerequiredbySection2079.14.Anagent's dutytoprovidedisclosureandconfirmationofrepresentationinthissectionmaybeperformedbyarealestatesalespersonorbroker associateaffiliatedwiththatbroker.
2079.18 (RepealedpursuanttoAB-1289)
2079.19 Thepaymentofcompensationortheobligationtopaycompensationtoanagentbythesellerorbuyerisnotnecessarily determinativeofaparticularagencyrelationshipbetweenanagentandthesellerorbuyer.Alistingagentandasellingagentmayagree toshareanycompensationorcommissionpaid,oranyrighttoanycompensationorcommissionforwhichanobligationarisesasthe resultofarealestatetransaction,andthetermsofanysuchagreementshallnotnecessarilybedeterminativeofaparticularrelationship. 2079.20 Nothinginthisarticlepreventsanagentfromselecting,asaconditionoftheagent'semployment,aspecificformofagency relationshipnotspecificallyprohibitedbythisarticleiftherequirementsofSection2079.14andSection2079.17arecompliedwith.
2079.21(a) Adualagentmaynot,withouttheexpresspermissionoftheseller,disclosetothebuyeranyconfidentialinformationobtained fromtheseller. (b) Adualagentmaynot,withouttheexpresspermissionofthebuyer,disclosetotheselleranyconfidentialinformation obtainedfromthebuyer. (c) “Confidentialinformation”meansfactsrelatingtotheclient'sfinancialposition,motivations,bargaining position,orotherpersonalinformationthatmayimpactprice,suchastheselleriswillingtoacceptapricelessthanthelistingpriceorthe buyeriswillingtopayapricegreaterthanthepriceoffered. (d) Thissectiondoesnotalterinanywaythedutyorresponsibilityofadual agenttoanyprincipalwithrespecttoconfidentialinformationotherthanprice.
2079.22 Nothinginthisarticleprecludesaseller'sagentfromalsobeingabuyer'sagent.Ifasellerorbuyerinatransactionchoosesto notberepresentedbyanagent,thatdoesnot,ofitself,makethatagentadualagent. 2079.23 Acontractbetweentheprincipalandagentmaybemodifiedoralteredtochangetheagencyrelationshipatanytimebeforethe performanceoftheactwhichistheobjectoftheagencywiththewrittenconsentofthepartiestotheagencyrelationship.
2079.24 Nothinginthisarticleshallbeconstruedtoeitherdiminishthedutyofdisclosureowedbuyersandsellersbyagentsandtheir associatelicensees,subagents,andemployeesortorelieveagentsandtheirassociatelicensees,subagents,andemployeesfrom liabilityfortheirconductinconnectionwithactsgovernedbythisarticleorforanybreachofafiduciarydutyoradutyofdisclosure.
NOREPRESENTATIONISMADEASTOTHELEGALVALIDITYORACCURACYOFANYPROVISIONINANYSPECIFICTRANSACTION.AREALESTATE BROKERISTHEPERSONQUALIFIEDTOADVISEONREALESTATETRANSACTIONS.IFYOUDESIRELEGALORTAXADVICE,CONSULTAN APPROPRIATEPROFESSIONAL.
ADREVISED12/21(PAGE2OF2)
DISCLOSUREREGARDINGREALESTATEAGENCYRELATIONSHIP(ADPAGE2OF2)
(C.A.R.FormCCPA,Revised12/22)
TheCaliforniaConsumerPrivacyAct(commencingwithCivilCode§1798.100)(“CCPA”),asamendedbyCaliforniavoters in2020,grantstoCaliforniaresidentscertainrightsintheirprivate,personalinformation(“PI”)thatiscollectedbycompanies withwhomtheydobusiness.UndertheCCPA,PIisdefinedbroadlytoencompassnon-publicrecordsinformationthatcould reasonablybelinkeddirectlyorindirectlytoyou.PIcouldpotentiallyincludephotographsof,orsalesinformationabout,your property.
DuringtheprocessofbuyingandsellingrealestateyourPIwillbecollectedandlikelysharedwithothers,includingreal estatelicensees,aMultipleListingService,realestateinternetwebsites,serviceproviders,lenders,andtitleandescrow companies,tonameseveralpossibilities.BusinessesthatarecoveredbytheCCPAarerequiredtograntyouvariousrights inyourPI,includingtherighttoknowwhatPIiscollected,therighttoknowwhatPIissoldorsharedandtowhom,theright torequestthatthebusinesscorrectordeleteyourPI,therightto“optout”orstopthetransferofyourPItoothers,andthe righttolimittheuseofcertainPIwhichisconsidered“sensitive.”YoumaygetoneormorenoticesregardingyourCCPA rightsfrombusinessesyouinteractwithinarealestatetransaction.However,notallbusinessesthatreceiveorshareyour PIareobligatedtocomplywiththeCCPA.Moreover,businessesthatareotherwisecoveredundertheCCPAmayhavea legalobligationtomaintainPI,notwithstandingyourinstructiontothecontrary.Forinstance,regardlessofwhethertheyare coveredbyCCPA,underCalifornialaw,brokersandMultipleListingServicesarerequiredtomaintaintheirrecordsfor3 years.IfyouwishtoexerciseyourrightsunderCCPA,whereapplicable,youshouldcontacttherespectivebusinessdirectly.
YoucanobtainmoreinformationabouttheCCPAandyourrightsunderthelawfromtheStateofCaliforniaDepartment ofJustice(oag.ca.gov/privacy/ccpa).Additionally,theCaliforniaPrivacyProtectionAgencyisauthorizedtopromulgate regulationswhichmayfurtherclarifyrequirementsoftheCCPA(cppa.ca.gov/regulations/).
I/weacknowledgereceiptofacopyofthisCaliforniaConsumerPrivacyActAdvisory,DisclosureandNotice.
Buyer/Seller/Landlord/Tenant Date
Buyer/Seller/Landlord/Tenant Date
©2022,CaliforniaAssociationofREALTORS®,Inc.UnitedStatescopyrightlaw(Title17U.S.Code)forbidstheunauthorizeddistribution,displayandreproductionofthis form,oranyportionthereof,byphotocopymachineoranyothermeans,includingfacsimileorcomputerizedformats.THISFORMHASBEENAPPROVEDBYTHE CALIFORNIAASSOCIATIONOFREALTORS®.NOREPRESENTATIONISMADEASTOTHELEGALVALIDITYORACCURACYOFANYPROVISIONINANYSPECIFIC TRANSACTION.AREALESTATEBROKERISTHEPERSONQUALIFIEDTOADVISEONREALESTATETRANSACTIONS.IFYOUDESIRELEGALORTAXADVICE, CONSULTANAPPROPRIATEPROFESSIONAL.ThisformismadeavailabletorealestateprofessionalsthroughanagreementwithorpurchasefromtheCalifornia AssociationofREALTORS®.ItisnotintendedtoidentifytheuserasaREALTOR®.REALTOR®isaregisteredcollectivemembershipmarkwhichmaybeusedonlyby membersoftheNATIONALASSOCIATIONOFREALTORS®whosubscribetoitsCodeofEthics.
PublishedandDistributedby: REALESTATEBUSINESSSERVICES,LLC. asubsidiaryoftheCALIFORNIAASSOCIATIONOFREALTORS® 525SouthVirgilAvenue,LosAngeles,California90020 CCPAREVISED12/22(PAGE1OF1)
CALIFORNIA
BROKER
(C.A.R. Form BCA, 7/24)
1. WHEN SELLERS LIST THEIR PROPERTY FOR SALE THROUGH A REAL ESTATE BROKER THEY AGREE TO PAY THE SELLER’S BROKER WHEN ESCROW CLOSES.
A. LISTING AGREEMENT COMPENSATION IS FULLY NEGOTIABLE: When a seller enters into a listing agreement with a broker, the seller authorizes the broker to find a buyer for the seller’s property and agrees to pay the seller’s broker if a buyer is found who purchases the property. Compensation amounts are not fixed by law and are fully negotiable between the seller and the seller’s broker. When negotiating compensation, the parties may discuss factors such as the broker’s expertise and experience, the type of broker services to be performed, and the broker’s time and expenses, among other considerations.
B. OPTIONAL ADDITIONAL COMPENSATION IF BUYER IS UNREPRESENTED: A listing agreement may include optional additional compensation amounts owed to the seller’s broker for situations where the broker takes on additional responsibilities or workload. Sometimes a buyer may not be working with nor want to be represented by a real estate broker. When that happens, the seller’s broker is not required to represent the buyer, and the seller and seller’s broker may decide that they do not want to create such a relationship. In those situations, the seller’s broker is advised to use a Buyer Non-Agency (C.A.R. Form BNA) to inform the buyer that the seller’s broker will be acting on behalf of the seller only, and not act as the buyer’s agent, throughout the transaction. However, because the buyer is unrepresented, the seller’s agent will inevitably have to do more work to facilitate the transaction. A seller may agree to compensate their broker for the additional work in such cases.
C. BROKER MAY REPRESENT BOTH BUYER AND SELLER; DUAL AGENCY: California law allows a brokerage company to represent both seller and buyer in a real estate transaction. At the time the agent, on behalf of a brokerage, obtains the signature of a seller on a listing agreement, the agent will not, in most cases, know who the eventual buyer will be for a seller’s property. Similarly, at the time an agent, on behalf of a brokerage, obtains the signature of a buyer on a buyer representation agreement, the agent will not, in most cases, know who the eventual seller will be for a property the buyer wants to buy. Because many individual licensees may work through one brokerage company, and some individual licensees work with many buyers and sellers, there is a possibility that the same brokerage company will represent both buyer and seller in a transaction. If licensees working through broker represent both seller and buyer, broker is allowed to receive compensation from each, provided the seller and buyer are advised of the relationship and the total amount of compensation the broker will receive.
2. BROKER AGREEMENTS WITH BUYERS:
A. BUYER REPRESENTATION COMPENSATION IS FULLY NEGOTIABLE: When a buyer enters into a representation agreement with a broker, the buyer authorizes the broker to locate properties for the buyer to buy and agrees to pay the buyer’s broker if a transaction is completed. Compensation amounts are not fixed by law and are fully negotiable. When negotiating compensation, the parties may discuss factors such as the broker’s expertise and experience, the type of broker services to be performed, and the broker’s time and expenses, among other considerations.
B. REQUIREMENT FOR WRITTEN AGREEMENTS: Pursuant to a nationwide class action settlement reached by the National Association of REALTORS® (NAR), participants in Multiple Listing Services are required to have a written agreement with a buyer prior to showing a buyer a residential property or giving a buyer a tour of such a property. The agreement must identify the amount of compensation to be paid to the broker for services provided and require that the broker cannot receive any compensation in excess of the amount specified in the agreement. Pursuant to legislation expected to become law in California on January 1, 2025, all licensees showing a buyer any type of property will be required to have a written agreement with that buyer prior to the showing.
C. ADVANTAGES OF WRITTEN AGREEMENTS: Buyers and their brokers benefit when the terms of their relationship and respective duties are in writing. A written agreement establishes clear, mutual expectations and helps avoid misunderstandings over the buyer and broker’s duties and the amount of compensation the buyer’s agent is to be paid.
3. WHEN ENLISTING A REAL ESTATE BROKER TO REPRESENT THEM, BUYERS AGREE TO PAY THE BUYER’S BROKER WHEN ESCROW CLOSES, BUT THE PERSON RESPONSIBLE FOR PAYMENT MAY BE NEGOTIATED IN THE TRANSACTION:
A. BUYER PAYS THE COMPENSATION PURSUANT TO A BUYER REPRESENTATION AGREEMENT:
A buyer’s broker may negotiate the amount of compensation directly with the Buyer and then document that agreement in a buyer representation agreement (C.A.R. Form BRBC or PSRA). The buyer then becomes contractually obligated to pay the broker by providing funds to escrow prior to the closing of a transaction.
B. SELLER PAYS THE COMPENSATION:
(1) Buyer negotiates for Seller to Compensate Buyer’s Broker: A buyer may make a conditional offer to the seller by including a term in the purchase offer asking the seller to pay the buyer’s broker if the buyer has already agreed to pay their own broker pursuant to a buyer representation agreement. If such a term is included in the purchase offer, the request will become one term among many that a seller may accept, reject, or negotiate by way of a counter offer. The possibility of asking the seller to pay the buyer’s contractual compensation obligation option should be discussed when creating a buyer representation agreement and prior to an offer being made.
(2) Buyer’s Agent negotiates an agreement directly with Seller: If a seller is unrepresented or does not have an exclusive agency relationship with another broker, a buyer’s broker may approach that seller asking the seller to sign an agreement (C.A.R. Form SP, Single Party Compensation Agreement) to pay the buyer’s broker. In this situation, the seller agrees to pay the buyer’s broker compensation without necessarily creating an agency relationship with the broker. When that happens, the buyer’s broker is advised to use a Seller Non-Agency (C.A.R. Form SNA) to inform the seller that the buyer’s broker will be acting on behalf of the buyer only, and not act as the seller’s agent, throughout the transaction. However, because the seller is unrepresented, the buyer’s agent will inevitably have to do more work to facilitate the transaction, which may be factored into the negotiation of the single party compensation agreement.
C. CHANGING PRACTICE RELATED TO A SELLER’S BROKER’S OFFER OF COMPENSATION:
Historically, in California, many seller’s brokers used a Multiple Listing Service (MLS) to make a unilateral offer to compensate a buyer’s broker who procured a buyer for the seller’s property. However, the nationwide NAR settlement prohibits the seller’s broker from using an MLS to make such an offer of compensation. The California Association REALTORS®’ (C.A.R.) listing agreement forms no longer provide for such offers of cooperating broker compensation nor does C.A.R. include other forms in its library of forms that might facilitate such offers. Buyers and sellers must separately negotiate compensation with their respective brokers, as specified above.
By signing below, Seller or Buyer acknowledges that they have read, understand, and have received a Copy of this Broker Compensation Advisory. Seller or Buyer acknowledges they have been advised of their various options regarding compensation to be paid to real estate brokers and that any written agreement they have signed with a seller’s or buyer’s broker reflects a mutual understanding.
Seller/Buyer
BUYER IDENTIFICATION OF PREFERENCES AND PRIORITIES, NO.
_____
(C.A.R. Form BIPP, 7/24)
□ This Buyer Identification of Preferences and Priorities, No. ____ is intended to supersede and replace any previously dated Buyer Identification of Preferences and Priorities.
1. PARTIES AND PROPERTY: _________________________________________________________________________ (“Buyer”), and ____________________________________________________________________________________________ (“Broker”) have entered into a Buyer Representation Agreement, dated ____________, beginning on ____________ (date) (“Representation Agreement”) for the acquisition of property (“Property”), as described therein.
2. IDENTIFICATION OF BUYER PREFERENCES: Buyer and Broker agree that it is beneficial to both if Buyer identifies, in writing, Buyer’s preferences and priorities for the purchase of Property. Although the information provided herein is only intended to represent a general expression of Buyer’s needs, wants and concerns as of the date signed below, Broker will use the information to narrow the parameter Broker uses in searching for property that might be acceptable to Buyer. Buyer acknowledges that Buyer’s preferences and priorities may change over time, and that current housing inventory and other market conditions as well as Buyer’s financial position will determine how many of Buyer’s preferences and priorities can be achieved in acquiring Property. Many buyers ultimately make compromises when choosing which properties to make offers on and acquire. It is Buyer’s responsibility to determine whether any property meets some, all, or enough of Buyers preferences and priorities.
3. BUYER PREFERENCES AND PRIORITIES (check all that apply):
A. Price Range: $ __________________________ to $ __________________________
B. Property Use:
□ Primary residence, □ Second home, □ Income producing, □ Relative personal use □ Other __________________________
C. Property Type:
□ Single Family Residence, □ Duplex, □ Triplex, □ Fourplex
□ Condominium (□ apartment style, □ townhouse style) □ Tenancy in Common
□ Manufactured / Mobile home, (□ In a park, □ On its own lot)
□ Pre-owned □ New construction
D. Property Features:
□ Minimum # of bedrooms: _____ □ Minimum # of bathrooms: _____
□ Minimum square footage: ________ □ Maximum square footage: ________
□ Single story, □ Multi-level, □ Corner lot
□ Yard (□ Grass, □ Drought tolerant), □ Pool (□ built-in □ above ground)
□ Solar Panels (□ leased/liened, □ owned outright, □ any), □ Gas appliances, □ Electric appliances
□ School district: _______________________________________________________________________________________
□ Accessibility/Disability features: _________________________________________________________________________
E. Location: □ City(ies): ___________________________________ □ County(ies): ___________________________________
F. Other (Any other desired features or matters of concern or importance to Buyer, whether based on previous experience, prior offers, expectations, intended future use, financial ability to make repairs or improvements, or otherwise): _________________
4. CONFIDENTIALITY: The preferences and priorities identified herein are intended as confidential information as that term is defined in Civil Code § 2079.13 et seq. Regardless of agency relationship in any transaction involving Buyer and Broker, these preferences and priorities will not be disclosed to any seller or seller’s agent except as Buyer authorizes Broker.
5. IDENTIFICATION OF AND CHANGES TO PREFERENCES AND PRIORITIES: Buyer represents that Buyer is not aware of any other significant preferences and priorities affecting Buyer’s effort to acquire property. Buyer has not made any verbal representations to Broker of additional preferences and priorities. Buyer agrees to notify Broker, in writing, of any change to Buyer’s preferences and priorities.
By signing below, Buyer understands, acknowledges and agrees that Broker cannot guarantee that any property will meet any or all of Buyer’s preferences and priorities and that it is Buyer’s responsibility to determine to what extent any property meets Buyer’s preferences and priorities.
Buyer has read, understands, and received a Copy of this Identification of Buyer Preferences and Priorities. Buyer is encouraged to read it carefully.
Buyer _____________________________________________________________________________________ Date:
Buyer _____________________________________________________________________________________ Date:
I acknowledge receipt of
AND
(C.A.R. Form BFPI, 7/24)
1. PARTIES: ________________________________________________________________________________________ (“Buyer”), and _____________________________________________________________________________________________ (“Broker”) have entered into a Buyer Representation Agreement, dated ____________, beginning on ____________ (date) (“Representation Agreement”) for the acquisition of property (“Property”), as described therein.
2. BUYER’S FINANCIAL AND PERSONAL INFORMATION: Buyer and Broker agree that it is beneficial to both if Buyer identifies, in writing, Buyer’s financial condition and personal information (‘Personal Information”) that Broker can use in assessing and identifying properties that may be satisfactory to Buyer. If Buyer does not qualify to purchase the type of property for which Buyer is interested, Broker and Buyer may mutually alter the terms of the Representation Agreement, or Broker may cancel that agreement.
3. PROPERTY FINANCING INFORMATION (where applicable, check all that apply):
A. Amount of deposit available: $ ___________________________
B. Amount of down payment available: $
C. Source(s) of deposit and down payment: □ Savings (cash in bank) □ Retirement account □ Gift □ Loan □ Assistance program, □ Sale of existing property (□ Already sold, □ Already in contract, □ Not yet listed), □ Other _____________________
D. Amount of additional funds available for broker compensation and closing costs: $
E. Source of additional funds:
F. Maximum Loan Amount: $
G. Lender Information:
(1) Company Name: ___________________________________________________________________________________
(2) Loan Officer name: _________________________________________________________________________________ (3) Phone: _____________________, Email: _____________________________________________
(4) □Pre-qualified, □ Pre-approved, □ Fully underwritten pre-approval
H. Financing type: □ Conventional, □ FHA, □ VA, □ Other ________________________________________________________
NOTE: If Buyer’s preferred financing or lender does not allow Buyer to pay certain closing costs, including broker compensation, Buyer will need to request that Seller compensate Buyer’s Broker.
I. Maximum monthly housing expense (for PITI, HOA fees, □ other _________________): $ ___________
4. OTHER FINANCIAL INFORMATION:
A. □ 1031 exchange, □ Expected legal settlement, □ Expected inheritance
B. □ Buyer intends to include a contingency to sell another property as part of any transaction (see C.A.R. Form COP)
C. Other: _______________________________________________________________________________________________
5. PERSONAL INFORMATION:
A. Current Housing: □ Own □ Currently Rent □ Other ___________________________________________________________
B. Property Ownership Experience: □ First time buyer, □ # of properties previously purchased: □ One, □ 2-5, □ More than 5, □ # of properties currently owned: _______
C. Real estate Related Experience: □ R.E. broker □ R.E. salesperson □ Contractor □ R.E Investor □ Trade (ex. Plumber, electrician, landscaper): _________________________________________________________________________________
D. Time Constraints: (e.g. Job relocation, sale of existing home, school start date): ______________________________________
E. Reasons for Purchase: ________________________________________________________________________________
F. Other:
6. CONFIDENTIALITY: The financial and personal information identified herein are intended as confidential information as that term is defined in Civil Code § 2079.13 et seq. Regardless of agency relationship in any transaction involving Buyer and Broker, the information will not be disclosed to any seller or seller’s agent except as Buyer authorizes Broker. 7. IDENTIFICATION OF AND CHANGES TO FINANCIAL AND PERSONAL INFORMATION: Buyer represents that Buyer is not aware of any other financial and personal information that would affect Buyer’s effort to acquire property. Buyer has not made any verbal representations to Broker of additional financial and personal information. Buyer agrees to notify Broker, in writing, of any change to Buyer’s financial and personal information.
By signing below, Buyer understands, acknowledges and that it is Buyer’s responsibility to determine to what extent any property meets Buyer’s financial and personal needs and abilities.
Buyer has read, understands, and received a Copy of this Buyer Financial and Personal Information. Buyer is encouraged to read it carefully.
Buyer _____________________________________________________________________________________ Date:
Buyer
I acknowledge receipt of a copy of this Buyer
By (Agent)
and Personal Information.
NOTICE OF BROKER INVOLVED PROPERTIES
(C.A.R. Form NBIP, Revised 7/24)
1. NOTICE: This Notice of Broker Involved Properties is being provided to you as required by the written Buyer Representation and Broker Compensation Agreement between ___________________________________ (“Buyer”), and ______________________________________ (“Broker”)(the “Representation Agreement”) dated ____________.
2. REPRESENTATION PERIOD: The Representation Agreement commenced on ____________ (date) and expires on, was extended to, or terminates on, ____________ (date)(“Representation Period”).
3. COMPENSATION AGREEMENT: Buyer has agreed to pay Broker the compensation provided for in the Representation Agreement for property described in paragraph 2B of the Representation Agreement and for which there was Broker Involvement (“Broker Involved Property”) as follows:
A. If (i) Buyer enters into a contract to acquire a Broker Involved Property within the specified number of calendar days after the expiration of the Representation Period, or any extension, and (ii) Broker has provided to Buyer a written list of Broker Involved Properties in paragraph 4 prior to the expiration of the Representation Agreement; OR
B. If after cancellation of the Representation Agreement (i) Buyer enters into a contract to acquire a Broker Involved Property during the Representation Period, or, if applicable, the specified number of days after the termination of the Representation Period and (ii) Broker has provided to Buyer a written list of Broker Involved Properties 5 days after the effective date of the cancellation of the Representation Agreement.
4. BROKER INVOLVED PROPERTIES: Pursuant to the Representation Agreement, Broker identifies the following property for which there was Broker Involvement:
□ If checked see attached list of Broker Involved Properties
5. NOTIFYING NEW BROKER:
If Buyer intends to enter into a Buyer Representation Agreement with another broker, Buyer is advised to provide this Notice to that broker. Failure to do so may obligate Buyer to pay both Broker and the other broker.
6. DATE OF NOTICE:
This Notice of Broker Involved Properties is being provided to Buyer on ____________ (date).
I acknowledge receipt of a copy of this Notice of Broker Involved Properties. Note to Buyer: Once this Notice of Broker Involved Properties has been delivered to you it is effective, even if you do not sign.
SELLER PAYMENT TO BUYER’S BROKER
(C.A.R. Form SPBB, Revised 7/24)
The following terms and conditions are hereby incorporated in and made a part of the Purchase Agreement, OR □ Other _________________________________________________________________, dated _____________, (“Agreement”) on property known as ______________________________________________________________________ (“Property”) in which _____________________________________________________________________ is referred to as “Buyer”, and _________________________________________________________________________ is referred to as “Seller”. and __________________________________________________________________ is referred to as “Buyer’s Broker”, and __________________________________________________________________ is referred to as “Seller’s Broker.”
Notice: The amount or rate of real estate commissions is not fixed by law. They are set by each Broker individually and may be negotiable between Seller and Broker(s) (real estate commissions include all compensation and fees to Broker).
1. SELLER PAYMENT TO BUYER’S BROKER:
A. AMOUNT: Subject to paragraph 1B below, Seller agrees to pay Buyer’s Broker ____% of the purchase price OR, if checked □ $ ____________ out of the transaction proceeds.
B. MAXIMUM SELLER PAYMENT OBLIGATION: Seller shall only be obligated to pay Buyer’s Broker the lesser of: (i) the amount specified in paragraph 1A, or (ii) the amount Buyer is obligated to pay Buyer’s Broker pursuant to their Buyer Representation Agreement, and if applicable less any amount that others have agreed to pay Buyer’s Broker. If there is no Buyer Representation Agreement, then Seller has no obligation to pay Buyer’s Broker
2. BUYER REPRESENTATION REGARDING COMPENSATION: Buyer represents that, as of the date signed by Buyer below, Buyer has a signed representation with Buyer’s Broker and the amount specified in paragraph 1 is no more than the amount Buyer is obligated to pay Buyer’s Broker pursuant to that Buyer Representation Agreement, and if applicable less any amount that others have agreed to pay Buyer’s Broker.
3. DELIVERY OF BUYER REPRESENTATION AGREEMENT: Buyer authorizes Buyer’s Broker and, if applicable, escrow holder, upon request, to deliver to Seller or Seller’s Broker a copy of the portion of the Buyer Representation Agreement identifying the compensation Buyer has agreed to pay Buyer’s Broker, such as the last page of C.A.R. Form BRBC
4. THIRD PARTY BENEFICIARY: Seller acknowledges and agrees that Buyer’s Broker is a third-party beneficiary of this agreement and may pursue Seller for failure to pay the amount specified in this document.
By signing below, Buyer and Seller each acknowledge that they have read, understand, accept, and have received a Copy of this Seller Payment for Buyer’s Broker.
SPBB REVISED 7/24 (PAGE 1 OF 1)
EXPIRATION DATE: The expiration date is changed to:
The Buyer Representation Agreement dated _____________, between ________________________________ (“Broker”) and ___________________________________________________________________________________ (“Principal”) is modified as follows:
NOTE: Any renewal of a buyer-broker agreement may not last longer than 3 months from the date of this Modification, unless Buyer is a corporation, LLC or partnership. If the renewal exceeds 3 months, this Modification is void, unless Buyer is a corporation, LLC or partnership.
COMPENSATION: The amount of compensation is changed as follows:
OTHER:
NOTICE: THE AMOUNT OR RATE OF REAL ESTATE COMMISSIONS IS NOT FIXED BY LAW. THEY ARE SET BY EACH BROKER INDIVIDUALLY AND MAY BE NEGOTIABLE BETWEEN PRINCIPAL AND BROKER (REAL ESTATE COMMISSIONS INCLUDE ALL COMPENSATION AND FEES TO BROKER).
MANAGEMENT APPROVAL: If an associate-licensee in Broker’s office (salesperson or broker-associate) enters into this Modification of Terms on Broker’s behalf, and Broker or Manager does not approve of its terms, Broker or Manager has the right to cancel this Modification of Terms, in writing, within 5 Days after its execution.
All other terms of the Buyer Representation Agreement as applicable, remain in full force and effect, except as modified herein.
OF REALTORS ® © 2024, California Association of REALTORS®, Inc. United States copyright law (Title 17 U.S. Code) forbids the unauthorized distribution, display and reproduction of this form, or any portion thereof, by photocopy machine or any other means, including facsimile or computerized formats. THIS FORM HAS BEEN APPROVED BY THE CALIFORNIA ASSOCIATION OF REALTORS®. NO REPRESENTATION IS MADE AS TO THE LEGAL VALIDITY OR ACCURACY OF ANY PROVISION IN ANY SPECIFIC TRANSACTION. A REAL ESTATE BROKER IS THE PERSON QUALIFIED TO ADVISE ON REAL ESTATE TRANSACTIONS. IF YOU DESIRE LEGAL OR TAX ADVICE, CONSULT AN APPROPRIATE PROFESSIONAL. This form is made available to real estate professionals through an agreement with or purchase from the California Association of REALTORS®. Published and Distributed by: REAL ESTATE BUSINESS SERVICES, LLC. a subsidiary of the California Association of REALTORS®
MODIFICATION OF TERMS - BUYER REPRESENTATION AGREEMENT (C.A.R. Form MT-BR, Revised 7/24) MT-BR REVISED 7/24 (PAGE 1 OF 1) MODIFICATION OF TERMS - BUYER REPRESENTATION AGREEMENT (MT-BR PAGE 1 OF 1)
I acknowledge that I have read, understand and received a copy of this Modification of Terms - Buyer Representation.
(C.A.R. Form COBR, Revised 7/24)
1. PARTIES AND PROPERTY: ______________________________________________________________ (“Broker”) has agreed to represent ___________________________________________________________________ (“Buyer”) for the purpose of locating and acquiring real property or a manufactured home (“Buyer Representation”) pursuant to a written Buyer Representation agreement dated _____________
2. NOTICE OF CANCELLATION OF BUYER REPRESENTATION: The representation may be cancelled by either Buyer or Broker or both by signing in the applicable box below and delivering to the other party. However, compensation may still be owed based on the contractual rights of the Buyer Representation agreement or otherwise.
A. By signing in the applicable box below □ Buyer □ Broker □ Both hereby gives notice to the other to cancel the buyer representation and terminate their agency relationship, duties, and responsibilities with and to each other. Compensation may be payable as specified below.
B. Effective date of cancellation:
(1) If the Buyer Representation agreement is for non-exclusive representation, the cancellation is effective immediately upon (or □ _____ days after receipt of) this notice.
(2) If the Buyer Representation agreement is for exclusive representation, the cancellation is effective 30 days after receipt of this notice.
(3) Regardless of the type of representation, Buyer and Broker may agree to mutually cancel the Buyer Representation immediately upon (or □ _____ days after) the last signature in the mutual cancellation box.
C. The notice applies to all properties that may be subject to the Buyer Representation (OR □ only for the following property(ies): ______________________________________________________________________________).
D. Once cancellation becomes effective, Broker will NOT be Buyer’s agent during any negotiation or transaction that results between Buyer and a Seller. Any questions that Buyer has about the property to be acquired shall be directed to the seller’s broker, if any, or to seller; to any new broker Buyer retains; or to Buyer’s own separate counsel
E. COMPENSATION DUE BROKER:
(1) Buyer agrees to pay Broker as specified in the written agreement between them. C.A.R. Forms BRBC and PSRA provide that in the event of cancellation Broker shall be entitled to compensation for those properties for which there was Broker Involvement if any such property is acquired during the Representation Period. Broker shall give Buyer a list of such properties within 5 calendar days after effective cancellation of the Buyer Representation agreement.
OR (2) □ Compensation shall be paid as specified in paragraph 3, below, and only if both parties agree by signing below paragraph 3
F. BUYER TO OBTAIN OTHER ADVICE: Broker advises buyer to obtain real estate, legal, tax, title, insurance and other desired advice from a qualified California professional.
Unilateral Buyer OR Broker Cancellation:
Buyer’s or Broker’s/Agent’s Signature (party cancelling the representation)
Buyer’s or Broker’s/Agent’s Signature (party cancelling the representation)
Buyer AND Broker Mutual Cancellation:
Buyer’s Signature
Buyer’s Signature
Broker’s Signature (By_______________________________) Date
COBR REVISED 7/24 (PAGE 1 OF 2)
3. (ONLY APPLIES IF PARAGRAPH 2E(2) IS CHECKED ABOVE AND BOTH PARITES SIGN BELOW) BUYER AGREES TO PAY BROKER AS FOLLOWS:
□ A. SUBSEQUENT ACQUISITION OF PROPERTY DURING REPRESENTATION PERIOD OR EXTENSION FOR WHICH THERE WAS BROKER INVOLVEMENT PRIOR TO CANCELLATION: The amount of compensation specified in the written Buyer Representation agreement if, within _____ calendar days after (i) this Cancellation of Buyer Representation; or □ (ii) the Representation Period specified in the Buyer Representation Agreement: Buyer enters into contract to buy, lease, or otherwise acquire any property specified below for which there was Broker involvement prior to the effective date of cancellation:
□ B. EXPENSES INCURRED: Buyer agrees to pay Broker $___________ for out-of-pocket expenses, costs incurred, and services rendered to Buyer prior to the effective date of the cancellation of the Buyer Representation agreement
□ C. BROKER TO RECEIVE A REFERRAL FEE: Broker will receive a referral fee from another broker pursuant to a separate written agreement with Broker.
□ D. NO COMPENSATION: Buyer owes no compensation to Broker.
□ E. OTHER:
Buyer and Broker each acknowledge by signing below that they have received a copy of this Cancellation of Buyer Representation and have read, understands, and accepts its terms.
Buyer _________________________________________________________________________ Date
Address
Q&A ~ BUYER REPRESENTATION AGREEMENTS:
Coldwell Banker–Campbell Realtors Simple Buyer Representation Agreement (SBRA)
Vs. C.A.R. Buyer Representation and Broker Compensation Agreement (BRBC)
On August 17, 2024, the practice changes required by the NAR settlement will go into e ect. One of those practice changes is that all MLS participants working with a buyer must enter into a written agreement before the buyer tours any home.
The New Batch of NAR settlement compliant forms will be released in zipForm® and other forms platforms on July 24. As a reminder, in order to be in full compliance by August 17, when the mandates of the NAR settlement go into e ect. It is imperative that C.A.R. members areready to use the forms whicharecompliant withtheNAR Settlement and prepared to discuss the changes with their clients.
The settlement does NOT require the use ofan N.A.R. or C.A.R.’s Buyer Representation Agreement.
The Consumer Federation of America released a scathing criticism of the C.A.R. Buyer Representation and BrokerCompensationAgreement (BRBC):CFA commissioned a report byUniversity of Bu alo contracts law professor Tanya Monestier, dated June 9, 2024.
Monestier analyzed a draft buyer representation agreement from the California Association of Realtors that was dated May 9,2024. She wrote, the BRBC form appeared to “disguise the obligation of the buyer to pay his agent.” Furthermore,“It is virtually unreadable, No layperson will be able to understand and appreciate the terms they are truly agreeing to.”
The management ofour brokerage agrees with the assessment oflaw professor Tonya Monestier. For our buyer clients, Coldwell Banker – Campbell Realtors will be implementing a one page Simple Buyer Representation Agreement (SBRA), and the following updated/revised C.A.R. forms:
Seller Payment to Buyer’s Broker (Form SPBB)
Disclosure Regarding Agency Relationships (Form AD)
Broker Compensation Advisory (Form BCA)
NBIP Notice to Broker Involved Properties
1. Are buyer representation agreements required?
Beginning August 17, 2024, when all MLS participants working with a buyer must enter into a written agreement with the buyer before the buyer tours any home. This is required by the terms of the NAR settlement.
2. Does C.A.R. haveany alternatives to their BRBC form?
Yes. The NAR Settlement does not require that C.A.R. forms be used and the Consumer Federation of America has madethecasethattheC.A.R.BRBCisdefectiveformanyreasons. Ifabuyerpreferstosignamorelimitedagreement for buyer representation, as an alternative to the BRBC, the broker may present the buyer with:
A. A Limited Property Representation and Broker Compensation Agreement (C.A.R. Form LPRBC).
Note: The LPRBC is intended to apply to an open house property that the broker tours with a buyer, and up to two more properties, is non-exclusive only, and the representation period is contractually limited to no more than 30 days.
B. Coldwell Banker-Campbell Realtors Managementbelievesthat our SimpleBuyer Representation Agreement is superior to the C.A.R. BRBC and LPRBC for the reasons articulated by law professor Tanya Monestier.
3. How do I earn the right to be paid under the Simple Buyer Representation Agreement (SBRA)?
The buyer must enter into an agreement to acquire the property described in the Simple Buyer Representation Agreement (e.g., single family home) during the SBRA’s specified representation period, or any extension thereof (and before the e ective date of any cancellation, if applicable). If the buyer and buyer’s agent have chosen nonexclusive buyer representation, there must also be“broker involvement,” which is discussed below in Question #4. If the foregoing requirements are met, compensation will be due even if the transaction closes after the representation period expires or the SBRA is canceled.
4. Under the SBRA, a buyer and I can enter into an exclusive or non-exclusive relationship. What is the di erence?
Paragraph 1 of the SBRA indicates that the BUYER Does Not have a signed Representation Agreement with another broker and grants the CB-CR agent the exclusive right to Locate or Procure real property for purchase by the BUYER identified by:
A. The following specified property(s) only: _________________________________________________________
B. All proper es submi ed by BROKER to BUYER via MLS system, BROKER website, email, text, and/or Excel files.
C. See BIPP Form (Buyer Iden fica on of Preferences and Priori es). BROKER is instructed by BUYER to research Realtor MLS and county records to create a list of proper es matching BUYER’s parameters, then begin contac ng owners for considera on of offer from BUYER. Once list is transmi ed to BUYER and owner contacted by BROKER (via mail, flyer, in-person, text, email, or direct message), these proper es shall be deemed “submi ed” to BUYER.
If a buyer already has a signed exclusive Buyer Representation Agreement with another agent, our best practices is to obtain a written copy of the Cancellation of Buyer Representation Agreement (C.A.R. Form COBR) before signing a Coldwell Banker Campbell Realtors SBRA with the buyer.
First, it should be noted that under a previously existing exclusive agreement, the broker has the right to be paid even if the buyer acts alone or with a di erent broker.
Second, unilateral cancellation under a non-exclusive agreement is e ective immediately upon receipt of the cancellation notice.
Unilateral cancellation under an exclusive agreement is not e ective until 30 days after receipt of the notice.
5.“Broker involvement”means any of the following:
A. The property was introduced to the buyer by the broker, or the property was one for which the broker acted on the buyer’s behalf.
Note that merely sending the buyer a list of properties is not deemed “broker involvement” without documented action on the part of the broker analyzing the property for the buyer specifically, assisting the buyer in the potential acquisition of theproperty (sending letter, knocking on door, emailing or texting seller). The agent must communicate with the seller or seller’s agent about the buyer’s potential acquisition of the property.
B. The buyer physically entered and was shown the property by the broker;
C. The broker showed the property to the buyer virtually (e.g., via a videoconference walk through);
D. Thebrokersubmitted totheseller asigned,writteno er fromthebuyertoacquire,lease,exchange,orobtain an option on the property;
E. The broker performed a market analysis related to the property or reviewed property-specific documents or disclosures with the buyer.
6. Who can cancel the SBRA, and how?
Either the buyer or broker may unilaterally cancel the agreement by giving notice to the other, or the agreement may be canceled by mutual agreement. No reason needs to be given for the cancellation.
The Cancellation of Buyer Representation Agreement (C.A.R. Form COBR) may be used to provide notice.
However, compensation by Buyer to Broker shall be due for all properties which were PRESENTED to the Buyer by Broker prior to the cancellation of the SBRA for a period of 180 days after the cancellation.
7. Am I entitled to compensation if, after notice of cancellation of the SBRA, the buyer enters into a contract to purchase property which I Presented to the Buyer (for which there was“broker involvement”) prior to the e ective date of cancellation?
Possibly. Yes, if the broker provides the buyer with a written list of those properties for which there was “broker involvement,” which must be delivered to the buyer within 5 calendar days after the e ective date of cancellation. The Notice of Broker Involved Properties (C.A.R. Form NBIP) can be used for this purpose.
No compensation will be due, if the broker does not deliver the list on time or if the property acquired was not on the list.
8. Am I entitled to compensation if, after the end of the SBRA representation period, the buyer enters into a contract to purchase the property described in the SBRA which I Presented to the Buyer (for which there was “broker involvement”) prior to the end of the representation period?
Possibly. First, the parties must have agreed on a protection period or safety clause in the BRBC, which is an option in paragraph 2D(3) of theform. Second, prior to the expiration of the BRBC orany extension thereof, the broker must deliver to the buyer a written notice of those properties for which there was broker involvement. Once again, the NBIP can be used for this purpose.
9. How can I get paid once the MLS can no longer be used to o er compensation from a listing broker?
There are four ways to get paid, and in any transaction more than one way may be applicable: METHOD C.A.R. FORM(S) TO USE
Simple Buyer Representation Agreement (CBCR Form SBRA)
Use paragraph 3G(3) in the Residential Purchase Agreement (C.A.R. Form RPA), and document that agreement with Seller’s Payment to Buyer’s Broker (C.A.R. Form SPBB)
The buyer pays the compensation through a buyer representation agreement.
The buyer negotiates for the seller to pay the compensation that the buyer owes the buyer’s broker pursuant to the buyer representation agreement.
Cooperating Broker Compensation Agreement (C.A.R. Form CBC)
Single Party Compensation Agreement (C.A.R. Form SP)
The seller’s broker pays the compensation to the buyer’s broker.
If the seller is unrepresented, the buyer’s broker can contract directly with the seller for payment.
10. How do I ensure that I’ll actually receive my agreed-upon compensation?
Payment of commissions will be handled through escrow. Ideally, have a signed SBRA and RPA with 3G(3) box checked and attached Form SPBB with compensation properly filled in.
In paragraph 18A of the RPA, the buyer agrees to pay the broker as specified in their agreement, and that the amount is payable upon close of escrow.
In paragraph 19D of the RPA, escrow agrees: 1) to pay the compensation due as long as the agreement is provided to escrow, and 2) that compensation disbursement is an irrevocable assignment.
11. Does the SBRA & Addendums/Advisories need to be approved by our o ice manager to be binding on the broker?
No, but muchlikealistingagreement,thebrokerormanagerhasfivedays to cancel the SBRA,and giventheevolving Brest Practices, CBCR Management does want to review and approve signed SBRA forms to ensure the form is properlyfilledoutandenforceable.Individualagents orbroker-associatesshouldprovidetheirbrokeragewithacopy of the SBRA as soon as possible once obtaining the buyer’s signature.
12. Are there any limits to how long a representation period can be?
Yes. The maximum representation period allowed under best practices for the SBRA is 3 months, unless the buyer is a corporation, limited liability company, or partnership.
However, the representation period may be extended for an additional 3-month (or less) period by using a modificationagreement,such asC.A.R.’s ModificationofTerms –BuyerRepresentationAgreement(C.A.R. FormMTBR).
Subsequent extensions are also permitted.
13. If I prefer to use the C.A.R. BRBC form rather than the Coldwell Banker-Campbell Realtors SBRA, may I do so?
Yes. Coldwell Banker-Campbell Realtors management hasrecognized the defects in theC.A.R. BRBC brought up by the Consumer Federation of America and has provided an alternative for our agents to use. But, any agent who prefers to use the C.A.R. BRBC form may do so provided they follow industry Best Practices.
14. Does the C.A.R. BRBC or Coldwell Banker-Campbell Realtors SBRA provide a guarantee that my commission will bepaid?
Absolutely not. The real estate industry is certain to see an increase in commission disputes, and it is very possible that buyers and sellers will refuse to pay commissions as agreed no matter what Buyer Representation Agreement form is used. We are in“unchartered waters” and it will be more important than ever to follow best practices.
When in doubt, ask your question via email to management. Always sign a Buyer Representation Agreement with your buyer clients BEFORE showing them property, and never forget to also have them sign the Disclosure Regarding Agency Relationships (and any other disclosures/advisories suggested by CB-CR Management).
Use the SBRA, LPRBC, and BRBC at your own risk. Nothing can be guaranteed when it comes to payment of commissions, and the court has wide discretion in these matters.
Legal action to enforce the payment of commissions due to Coldwell Banker-Campbell Realtors shall be at the sole discretion of the management.
Failure by agents to properly execute Buyer Representation Agreement forms, submit NBIP forms timely, and have documentation to prove broker involvement may render enforcement of commissions due improbable or impossible.
