Let’s Talk Listing Agreements
With Juana Watkins, Florida Realtors Vice President of law and Policy and General Counsel 
TRT: 1h 15m 19s
Video Transcription

Juana directly addresses camera:      Good afternoon everyone. Thank you so much for joining us today. As we talk about listing agreements. So this is the latest in a series of sessions that we have planned for you. We had a session last week on Buyer Broker Agreements, and today we're going to talk about listing agreements. We recently released amended versions of our exclusive right of sale listing agreements.

And so, the, the picture is starting to become a little bit more clear. I hope and certainly hope that after today's webinar, you may start to see how some of these forms start to work together. The exclusive Right of Sale Listing Agreement form, the Compensation Agreement forms the Buyer Broker agreement, and some of these other forms that we have either created or amended for your use.

There are more forms to come. But today we're going to talk about listing agreements. So a couple of housekeeping matters. This webinar will be recorded. And as always, we will make these slides available to all of you. So we want you to be able to revisit this information because there's a lot of information.

We are thankful for all of the questions you gave us, because I hope it will help us to, provide you the information that you need today, to again, try to make a more, comprehensive picture, for some of these forms and how they fit together. So, we will certainly record this. We will certainly provide the slides, but we're going to ask you to give us a few days here.

We are still creating forms and still amending forms. And so, the team is, is juggling quite a bit. So if you can give us a few days, before we post these, that would be fantastic. So now let's talk listing agreements. All right, so Margy (Grant) has given you a great antitrust statement. But I'm going to include this antitrust statement and the slides so that as you are revisiting this, you understand that everything we talk about here today and all of this information, as you revisit it, should always be looked at through the lens of antitrust as you are shaping your business practices in this new post settlement NAR world.

Now settlement agreements. What does the settlement agreement say about listing? So the first thing I'll point out here as we go through this webinar today, when you see a slide with a number, as a part of the question, that number represents an actual frequently asked question that is a part of the National Association of Realtors® published FAQs for the settlement found on facts dot realtor.

We thought it was important to give you a point of reference so that you can not only go back and revisit this information, but also cross-reference that information to the settlement of frequently asked questions that NAR is posing. we know that the settlement covers a couple of major issues, right? No more MLS offer of compensation, to be extended, as a part of the Multiple Listing Service. We understand that. We also know that for buyer representatives, the buyers will now have to have a written agreement, prior to touring the property, if they are working with the buyer. So we understand those two major components, but there are requirements as it relates to listing agreements and working with sellers.

So the first thing I want to point out to you is there are these additional listing agreement practice changes that we want to make sure you understand. So the settlement provides that MLS participants working with sellers must disclose in conspicuous language that brokers commission are not set by law and fully negotiable. We've seen that with the buyer agreement so far we've seen that with compensation agreements.

So this idea of compensation not being set by law and being fully negotiable is something that should be in every form in all of your office material, as you are working with both buyers and sellers. The settlement also provides that MLS participants must disclose this in writing and listing agreements. So if you have a written listing and you're working with a seller, then this is something that must be in your form.

The settlement speaks to government specified forms versus non-government specified forms. You know, don't read too much into that. It's important to know that some states have forms that are promulgated by the Real Estate Commission. So it's kind of speaking to that issue. We don't have that here in Florida. Just know that as you are working with sellers, you need to have that conspicuous language in your listing agreements.

And as we talk about our amended forms, you'll see that in our agreements. Now, what does the settlement speak to in terms of the seller’s approval or authorization or what the seller needs to say with respect to offers of compensation? Well, this is not earth shattering. We've kind of always had these conversations with sellers about offers of compensation and whether they will authorize it and how much they will authorize.

But the settlement, specifically in frequently asked question number 52 addresses this issue. Must a Realtor® or MLS participant acting for a seller obtain prior approval from a seller before an offer of compensation is made? That answer is yes. The settlement provides that the practice changes required for the settlement says that a Realtor® or MLS participant acting for the seller, must have the seller, approve any payment or offer of compensation.

Okay, so that is something required. And that is something that as we talk about our listings, we will highlight the provisions in the amended listing agreement that meets that requirement of the settlement. So as we develop these forms we took pain staking effort to make sure that we could check off that box for you for settlement compliance. And again, the settlement also provides that the disclosure must be made to the seller in writing, in advance of any payment or agreement to pay another broker, agent or other representative as acting for buyer and must specify the amount or the rate of such payment.

So make sure you're clear on the fact that the settlement does indeed require that amount or rate of payment, be disclosed to the seller. Now, next question. What should the listing broker advise their client about the prohibition for offers of compensation in the Multiple Listing Service? Well, listing brokers should inform their clients that that offer of compensation is no longer an option in the MLS.

We got a little theme music going in the studio. so the offer of compensation, is now prohibited. That is a major component of the settlement. And so the, the, the listing broker should make sure to take great care to explain to the seller that that offer of compensation. And while it can still be extended to the cooperating broker, it cannot be extended

in the MLS, offer of compensation. Okay. so. Let's see. we're going to move on to the next question. That one is one that we get frequently because it's often confused with the buyer's agreement. So in the buyer's agreement, you heard me say last week and you'll hear, it often described in the buyer broker agreement that there is a requirement that any compensation be objectively ascertainable and not open ended.

And so oftentimes the question will be asked, well, Juana, is that same objectively ascertainable and not open ended requirement a part of our listing agreements? And that answer is not exactly no. You are not required to specify that compensation. with the say it with your seller that you decide as a part of your listing.

It does not have to be defined in a way that is objectively ascertainable, not open ended. And I've said in the past, objectively ascertainable is legal-ease for a clear right. Easy to define. The customer should be able to easily state what the compensation is. And so I say not exactly, because isn't that something that we've always, done as an industry?

We've always made our agreements such that the seller knows what they're paying. So the settlement doesn't specify that language. and so the seller and the listing broker are free to define the payment in any way they would like, so long as it complies with the law and any preexisting MLS policy. And so long as it specifies the amount or the rate of payment.

So the settlement actually instead of ascertainable and, objectively ascertainable, it uses the standard, specifies the amount and rate of payment when it comes to the listing agreement. So that's what you want to make sure that you comply with. So now we set the stage right I think it's important to do that because as we talk about the listing agreement and the changes that we've made to that listing agreement, I want to make sure that you have kind of the lens through which you have to look at that language as we, you know, talk about the amendments that we made and why we made some of those changes.

So we have revised the listing forms. There are several versions of that listing agreement form. We have the exclusive right of sale listing agreement transaction broker, and I'm going to go to the next, slide so that I can kind of explain them to you a little bit. So this is the form that obviously grants, from the seller to the listing broker, the right to list the property.

And kind of establishes that exclusive relationship with the broker in the context of the transaction broker relationship. Then we have the exclusive right of sale listing agreement, consent to transition to transaction broker, where the listing broker is going to start off in a single agent relationship with permission to transition, should the listing broker also take on a buyer, in a kind of in-house transaction. And we're going to talk about that quite a bit today as well. There's also the exclusive right of sale listing agreement form the ERS-17nr, that's the official form number that we have here in parentheses. If you're looking for the forms in Form Simplicity, you want to verify that you have the right version.

That's the one where there will be a no brokerage relationship with the seller and the listing broker. We also have the single agent version of that form, and then one that we have that that some of you may or may not know about is the exclusive brokerage listing agreement form. And this is the EBLA-12. This is an interesting form that grants that, right to list the property to the broker.

But unlike the exclusive right of sale listing agreement, where, you know, the broker gets paid regardless of who sells the property and including the seller, the exclusive brokerage listing agreement form, the seller reserves that, right to sell the property themselves without owing compensation to the broker. So those are the forms that have recently been amended.

Now, I'm going to say this about the forms I want you all to be very, very careful. Later we're going to talk about why the date of these forms is so critical. to the form that you're using. We've always said that you should make sure that you're using the most current version of the form, because then you know that it has been updated for legal compliance, statutory change, settlements, things like that.

But now more than ever, it is critical. It is critical that you tell your agent that agents you make sure that you are going to Form Simplicity or whatever forms program you use. If you're using local board forms, I applaud you. That is your right, but make sure you are using the most current version of the form. Take forms off of your hard drive off of your, you know, saved folders right now because you need to be using the most current version or you may not be complying with the settlement.

And the risk of that is not just perhaps missing a disclosure that the legislature required. The the risk of that now is using a form that is so outdated that you may be risking anti-trust liability. Okay. So that is why you want to use the most current version of the form. Now let's talk about our forms paragraph by paragraph.

And as we do that, you should know that I'm using as, as an example here, the exclusive right of sale listing agreement form for a transaction broker. That is one that is frequently used, because of the popularity of the transaction broker relationship here in Florida. And so that is the form we're going to use here today.

Now, this is the first paragraph. And, you know, folks tend to skip over this paragraph, right? Because it tends to be kind of, you know, we talk about the parties to the agreement and, and things like that. But I want you to pay attention even to these first couple of lines. Seller and broker capital “S”, capital “B”. These are defined terms as we talked today.

As you, look at documents, I want you to see that these are capital “S”, capital “B”, defined terms. That's going to become very important as we get into the frequently asked questions. And the other provisions of this document today, the seller and the, the broker, broker being the brokerage. Yes. It could also be the authorization.

It could be a team, leader of a team. But for purposes of what is going on this line, the broker, this is the brokerage. This is the, the real estate company or the broker who to whom the seller is forming this relationship and promising to pay because compensation belongs to the broker. And then the broker agrees to compensate his or her agents as required by their agreement, that is, the authorized agent for purposes of this agreement.

And we'll get into that a little bit more in just a minute. Now, authority to sell the property. This agreement is granting to the broker. The seller is granting to the broker the exclusive right to sell this property for the term specified in this agreement. So we are married. I've talked about that. These various stages of agreements, we are married for the term of this agreement.

And it doesn't matter who sells the property. The seller has agreed that during this term, the broker is entitled to the compensation provided for in the agreement for the term specified. We are going to describe the property, the street address, the legal description. We may include some personal property here. We're going to specify if it's occupied or not.

That has not changed a great deal. The price in terms of this document did not change a whole lot. It is specified here in the way that it has. But I do want to point out subsection C of paragraph three, seller's expenses. Seller will pay mortgage discounts, closing costs or concessions not to exceed a specified dollar amount.

And any other expenses. So, concessions have been added here. Why? Because the settlement speaks to the ability of a seller to provide compensation to the buyer in the form of concessions. This concessions, while it cannot be conditioned on the buyer paying their broker with the concession amount that the seller can give the buyer a dollar amount that the buyer can choose to use to pay their agent.

So the first thing you want to notice about (c) is we added concessions. The next thing you want to notice about (c) is it is no longer a percentage amount. It is a dollar amount. Why is it a dollar amount? Well simply put, it is clear to the user that concessions should not be a percentage of the sales price.

It is a flat dollar amount. It just makes it clear that it's, it's not going to be a percentage that could perhaps, in the mind of someone, equate to the same percentage of fruit that someone might pay, for compensation, and so here it has changed to a dollar amount. Now moving on to paragraph four, broker obligations,

Look at this last sentence. It has been updated to read that among the broker obligations, we are clarifying that this includes, except when not in the seller's best interest, cooperating and communicating with other brokers. Right. That's always been the case. And making the property available for showings. Maybe an unrepresented buyer may want to see the property, and it is a part of the broker's obligations to, to provide access to that property for showings.

Okay. Skill, care and diligence. As a transaction broker, you get to use that on behalf of your seller to make the property available for showings. All right. Now paragraph five Multiple Listing Service. Few changes here. This is standard language though, that we see about using the property, placing it in the Multiple Listing Service. But there is no obligation here to place it in the MLS.

It is completely up to the seller. Although we specify that, you know, the clear cooperation and some of the other requirements, we specify the conditions upon which the property is advertised and, and placed in the Multiple Listing Service. And what that is is required under MLS rules. So, take a look at paragraph five. No major changes as it relates to the settlement though.

Paragraph six broker authority. These are standard things that we're used to seeing. This is the authority of the broker seller is authorizing the broker, to do certain things. And these are fairly standard. So we won't belabor this point here. I will though, however, show that that, paragraph E deals with the lockbox. You want to make sure that you clarify that issue.

You want to clarify the issue of offers. But, here we are. This is standard language under the broker, authorization seller obligation under paragraph seven. It's the same pretty much as it has been fairly consistently. So we're not going to spend a lot of time here because I want to get to the cooperation, language that is, in the compensation language that is paragraph eight, nine and ten.

So let's talk about compensation.

Seller will compensate broker as specified if a buyer is procured. This is standard language ready willing and able buyer. Then compensation is due right. Under what conditions will I be paid? Seller will compensate the broker if a ready, willing and able buyer is procured. So that is that is how compensation is defined. How much the compensation is, is specified,

in (a), (b) and (c). You're gonna get to specify your fruit here. You're going to specify when you fruit is owed (a), no later than the date of closing specified in the sale and purchase contract. So all of these different options are fairly consistent with what you have seen historically in terms of how you define your compensation.

Now let's get to a few additional, details here. (d)... (d) tells us, some conditions upon when the compensation is due. If the interest, any interest in the property is transferred, it's going to be due. If the seller refuses to, to participate in an offer or a contract, it's going to be due. And then three, we specify, protection period.

Upon which, as we always have the, the listing brokers compensation is protected. If after the termination date, the buyer tries to transfer interest in the property. Okay, so fairly standard stuff here. (f) however, is additional information. (f) is language that again is required as a part of the settlement. Brokerage commissions are not set by law and are fully negotiable.

Now let's look at this next paragraph. This paragraph is very different. Even the title of this paragraph is different. This used to be the paragraph about cooperating compensation. Now it is called Notice to Seller Regarding Buyer's Broker. We need to spend a little bit of time here. The buyer's broker, even if compensated by seller or broker, will provide services for the buyer.

First thing I want to point out here is buyer's broker underlined the small “b” small “b” buyer's broker. So we don't know who that is. That is not a defined person under our contract. But seller and broker are. So make sure we define our parties here. That buyer's broker will provide services for their buyer. The seller is advised and is aware that the seller may make but is not obligated to may, but is not required to compensate a buyer's broker upon closing.

Okay, it is up to that seller. The seller may choose to enter into a separate written agreement to pay buyer's broker, or their second option is to approve the Broker, Capital “B”, their broker. Their listing broker, the capital B define party in this agreement to pay buyer's broker in accordance with paragraph ten. We haven't gotten to paragraph ten yet, but it references paragraph ten.

Okay, so what are we saying here? We're saying that the seller can decide as a part of marketing their property, that they are going to offer compensation to the buyer's broker. They are not required to. They have that choice if they choose to do so. They have two routes available to them to do so. One is to to directly extend an offer of compensation to the buyer's broker.

The other option is to allow their broker to authorize, approve, as required by the settlement, their buyer, their broker to pay the buyer's broker compensation. Those are the two options available to the seller. So, then they go on further to explain that if the seller is going to exercise one of those two paths, they're going to go down one of those two paths.

Seller also understands, A. -buyer's broker may include this broker, Buyer's broker. Little “b” buyer's broker. The unknown person... may include this broker, capital “B”, my broker. The listing broker. The broker who is a party to this agreement. If broker also works with the buyer in this transaction. So, in other words, if the listing broker then acts as a transaction broker or works with according to the language of the seller, the buyer as well, thein transaction, then they are now also the buyer's broker.

It is the in-house deal. Okay. If this occurs during the duration of this listing, the broker, the listing broker, capital B, will be entitled to the compensation in paragraph eight. Let's go back to paragraph eight. This is where we defined the compensation okay.

So if this occurs the listing broker will be entitled to the compensation in paragraph eight for the services that they perform for the seller as the listing broker as well as the buyers broker compensation in paragraph ten, which we're just going to talk about in a minute for services performed by the buyer. And the seller should take care in how they define paragraph eight’s compensation. Okay. We're giving them that warning. Seller, you need to be careful and consider that as you fill out paragraph eight. Now we also specify that broker may receive separate compensation from the buyer for services rendered to the buyer by the broker. Because the purpose of the settlement is to kind of disclose compensation from all sources in the transaction.

So we want to make sure in paragraph nine, the seller is given notice of all the possible ways the brokers might be compensated in the transaction. All right. So this is paragraph ten. Paragraph ten is the paragraph that we've been talking about, in referencing in paragraph nine, compensation to buyer’s brokers. Brokerage commissions not set by law and are not fully or and are fully negotiable.

As first thing, we're coming out of the gate with the required disclosure under the settlement, we've already disclosed that once we're disclosing it again, we want to make sure the seller is clear. Seller approves the following. Okay. Remember, the settlement said they have to approve. Seller approves the following and they check all that applies. Seller authorizes the broker to offer compensation to the buyer broker. And they can specify the amount. And then it says this amount will be paid from broker capital B to the buyer's broker from the compensation amount agreed in paragraph eight. So, remember we've said to the seller, be careful how you structure paragraph eight, because this compensation will be set forth in a separate written agreement between the broker and the buyer's broker.

Clear as mud, I know, but bear with me. I got some slides in just a moment to help you with this. The other option that the seller has is the seller authorizes the broker to offer compensation to buyer's broker from the seller, in the amount of, and they get to specify that. And again we say this compensation will be set forth in separate written agreement between the seller and little “b” buyer’s broker, the yet to be determined person and (c) gives the seller the option to say I will not be offering compensation to the buyer's broker. Now, Juana, please help me tie together eight, nine and ten. Please help me make this make sense. Okay.

Let's look at ten (a). Ten (a) says the seller authorizes their broker, capital B broker, to offer compensation. Okay, so remember frequently asked question number 52 says the seller has to authorize or approve this. So we're we're, we're covering that with this phrase. And the seller is telling their broker, in 10 (a), you can compensate the buyer's broker, the yet to be defined party.

We don't know who that is. We just know it's going to be the buyer's broker. You can, you can compensate them in this amount okay. But keep in mind this amount will be paid from the broker, the listing broker to the buyer's broker from the compensation in eight. What does that mean, Juana? That means that there will be a sharing a splitting of the fruit in the basket.

This should sound familiar to you. All right. This is where the the listing broker is going to collect what one might perceive or call a full amount a total amount. And that listing broker is going to split that amount with the buyer's broker. This is not a foreign concept to you, right. And it is going to be memorialized in a separate written agreement.

Make it make sense Juana, I will. This is going to be memorialized in a compensation agreement. Seller's broker to buyer's broker. We have given you that form. Okay. This is, as you see, an agreement between the seller's broker and the buyer's broker. And the property address would be the address of the listing, okay, that the seller has agreed to, the listing broker can share this compensation for.

So this is where these compensation agreements come into play. You're going to memorialize it on this form. If you happen to know the buyer's name, great. This is why we made the buyer's name optional, because you may not yet know the buyer's name, or you may not want to give your buyer's name. And that's fine. But the listing broker gets to share now with the buyer's broker, and they get to do so by memorializing this agreement in paragraph five, according to the terms of the listing agreement that the seller has approved the, the seller's listing broker to pay and share the compensation with the buyer's broker.

All right. So I hope that made sense for you because now I want to talk about 10 (b). This is where in the listing agreement the seller has said I authorize you, broker, to extend an offer of compensation on my behalf to the buyer's broker. I am promising to pay, I the seller, am promising to pay the buyer's broker directly, not write a check directly.

But the promise to pay comes from me to the buyer's broker. Now the seller needs to remember that when they are filling in paragraph eight for the compensation... why Juana? Because the total amount of fruit is not going to the listing broker.

Because the seller is going to bifurcate the fruit, the seller is agreeing to pay some fruit to the seller’s listing broker. and some fruit to the buyer's broker directly. Remember buyer's broker little “b”? We don't know who that is, so at your listing agreement or your listing appointment if that is the desired route for the seller, the seller is going to be presented with the seller to buyers broker compensation agreement because the parties to that form is the buyer's broker and the seller. The listing broker is out of the, the process because the compensation flows from the seller to the buyer's broker and paragraph eight will have been completed.

With that in mind, okay. The property address is the property that's listed. The term is what it is. And paragraph four will be the compensation amount that the parties agreed to, that the seller approved the listing broker to extend in the listing agreement paragraph. Now 10 (c) is easy. This is where no compensation is going to be offered to the buyer broker at the time of the listing. You can have a conversation with the seller about that. Explained to the seller, the buyer may still condition offers on compensation being paid to their broker. Explain to them that they may still want to consider concessions that could be used for that purpose. But no separate agreement would be needed if the seller elects 10 (c) as the way, to go in paragraph ten.

All right. I hope that made sense for you. Now, paragraph 11. Pretty standard stuff. This is transaction broker language. Paragraph 12 has not changed much. This is a conditional termination language. We talked about that a bit earlier. Dispute resolution. Dispute resolution hasn't changed. Here the parties have the option to initial, to do binding arbitration if they prefer not to litigate any disputes.

And that's, that's perfectly acceptable as well. Paragraph 14 has changed some but you know, it it's, it's fairly standard language. And then paragraph 15, if you find within your office that your business practices require that you change this listing in some way, shape or fashion in order to comply with the settlement, paragraph 15 additional terms is where you will input additional language in order to make sure that you, capture that. Signators, signators on the form, you have the broker or the authorized sales associate gives some thought in terms of what it is, how it is, you're going to memorialize the, the authority that you extend to your agent's broker in order to sign this agreement. And then, finally, on the bottom, a footnote to our forms. We now have, this language just says the parties acknowledge that this form should not be used to share offers of compensation, to buyer brokers or other buyer representatives via any field in the Multiple Listing Service.

We want to remind you at the bottom of every single page that this form is no longer a vehicle to convey, an offer of compensation in the Multiple Listing Service. It is just above or excuse me, just below the initial. So, your seller will see that at the bottom of every page as well. Great talking point to make sure that you are reiterating that to your sellers.

Now that's the form. again, we we went through the effort of making sure that the form could check off the boxes of what is required in the settlement. And that's great and all, Juana, you've you've told me what it says. You've given me a little bit in terms of how to use it. But there are some additional practice related questions that we've received from you all that I really want to spend a little bit of time answering for you, the first being on August 17th.

Joanna, please tell me what to do with my pending listings. Do I have to disclose? Do I have to amend? Do I have to start over completely and just do a whole new listing form with my sellers? Okay, very legitimate questions. And the good news is there's a FAQ for that. So FAQ number 52 from NAR, amending agreements disclosing settlement terms. If you have an active listing and by active NAR defines that term as a pending agreement for your services, a pending listing in this case that is not yet subject to a sale and purchase contract.

If you have such an agreement on August 17th, you may have to amend. You may have to disclose there's, there's no requirement from an a, from a FAQ perspective from NAR or from, from, from anything that I see to recommend to you that you have to terminate the agreement and have a completely new one executed. But I have to say, obviously, I'm answering these questions from the perspective of a Florida Realtors®  exclusive right of sale listing agreement form.

Right? So, if you're using another form, you're going to have to assess that based on the language of that particular form. You should not have to redo the form if you have, a form that, is one of our recent Florida Realtors®  exclusive right of sale listings, you probably need only disclose. So let me get to the dates because the dates are going to matter here.

NAR has given us guidance. If you need to disclose, then Florida is going to have a form that is very similar to the NAR disclosure, and you should expect this form sometime this week. Okay. This will, will be a disclosure non signed disclosure that you can send to all of your customers that will simply provide the necessary elements of the settlement.

Okay. You're going to you're going to document that you provided it to them. But you're, you're not going to need to have them sign it. But that is if a disclosure is required. But if you actually have to amend, let me get to, the actual amendment and what that looks like. If a listing instructs the listing broker to make an offer of compensation in the MLS,
then you're going to need to disclose, okay? If you have a listing that that never referred to or required anything, you know, in terms of an MLS offer of compensation, you're fine. You can just make the disclosure, the disclosure, no signature, no amendment. And you'll be fine. But if your listing referred to the need to make an MLS offer of compensation, then you will need to amend that listing.

So, check your dates with respect to the exclusive right of sale listing agreement form. Our most current form change, these that we've been talking about, change July of 2024. If you use that form, no amendments required, simple disclosure. You're good. And actually no disclosure even required for those forms. But here's what I recommend. I recommend you send a disclosure to every customer you have a pending document with.

That's the easy thing to do from a best practice perspective. But technically, our July 2024 agreement no amendment, no disclosure. Okay, the March 2024 version of the exclusive right of sale listing agreement that is the document that, the last amendment date just before the July version, March 2024. The language in question in that agreement said that, if the box was checked, then you need only referred to MLS rules as to whether or not there needed to be, you know, an MLS offer basically to put the property into the MLS.

So, you would not need to amend the, the document if you're using the exclusive right of sell listing agreement March 2024 or later. Okay. No amendment, just disclosure. No amendment, just disclosure. But if you used the version of the exclusive right of sale listing agreement prior to March of 2024, you would need to amend your listing and the language specifically that would need to be stricken from the agreement is the language that says none of the above. If this box is checked, the property cannot be placed in MLS. There's a line in the agreement that says that, that is the language that needs to be stricken. You could use the modification to exclusive right of sale listing agreement form to remove that language from the listing, and you would be compliant, with the settlement, so long as you also give the disclosure.

And so this is why I'm saying I think every customer you have, you should give the disclosure form. At a minimum, you need to give the disclosure to be safe. All right. Clear as mud. That's why you can get these slides. Now, your other questions, your general questions. There are many. Let's go through quickly here. Juana, are written buyer agreements required when I am the listing agent and I'm talking to unrepresented buyers.

Okay. Very common question. No. If you are simply talking to an unrepresented buyer in your capacity as a listing agent, and you are having that conversation on behalf of your seller, no, you don't have to give them a written list.... buyer broker agreement. You are working with the seller, not the buyer. And you are not, working with the buyer as required by the terms of the settlement.

Now, you need to be careful about agency requirements, and we're going to talk about that in just a second. But remember you have to use skill, care and diligence on behalf of your settlement. Excuse me on behalf of seller. Please don't let the seller find out you ran away from buyers and you ignored them. If they were interested in the seller's property, they're probably not going to be too happy with you that you ignore buyers who want to talk to them about their property.

Okay, you're going to do it, and you're going to do it carefully. But you can't just ignore buyers who might be interested in that seller's property. I'm not sure that's in the seller's best interest. Okay, now let's kind of dive into that a little bit. Let's say I'm at the open house, I'm working on behalf of my seller, and I need to provide access to buyers.

Some of them come in with an agent and some of them are unrepresented. Juana, will there be a requirement that I sign a written buyer agreement with these buyers who want to tour the property that I have listed? No, no. So remember, the settlement talks about having to sign a written buyer’s agreement when you are working with a buyer.

And what does “working with” mean? You've heard me talk about this before. Working with means that you are providing brokerage services to a buyer, versus simply marketing your services, or just talking to a buyer in your capacity as a listing broker. If you are providing broker services to that buyer, that means that you are helping them to identify potential properties, arranging for them to tour the property you're performing, or facilitating negotiations on behalf of that buyer.

You're presenting offers by that buyer or other services for the buyer. Those are the examples that the settlement gives us for when you are working with a buyer. But now if you are having conversations with a buyer because you're the listing broker and you're providing them access to the home in your capacity as listing broker, then you're not really working with the buyer.

You are working with the seller. Okay, so you wouldn’t need to sign a buyer broker agreement to give them access to the home for, an open house or to tour it.

But think about chapter 475, because this settlement is not intended to change state agency laws. But you do have to be mindful of the intersection between the practice changes in the settlement and agency requirements. Right. There is some consistency, some synergy between the two. Chapter 475 says for open houses that if it does not involve eliciting confidential information or the execution of contractual offers or representation or negotiating price or terms, then you're not triggering the agency disclosure requirements of the statute.

But you got to use your judgment right? Because an unrepresented buyer touring a house may come to you and start to talk about some of those pricing, and terms, and issues that could cause you to feel like you need to give a no brokerage relationship or otherwise clarify with that buyer that you are not representing them and that you are working with the seller only.

So there is certainly some synergy, but there could be a time where touring the property or interacting with an unrepresented buyer could cause you to feel the need to give a no brokerage relationship, or feel as if chapter 475 might be invoked. So make sure you are always clarifying who you are working with, during the course of that interaction.

Just so just be careful because an investor might be clear on this, where as a first time home buyer may not be quite so clear. So you got to consider the circumstances and make sure that that even your seller as well understands the nature of the interaction with the buyer. All right. Now,

The other thing I want you to consider when you're, when you're talking about working with the buyer, is, you know, so what happens if the buyer does decide to purchase one of my listings and wants to work with me? Well, if you find yourself as the listing broker, you know, presumably, and let's say a transact transaction broker relationship with your seller or with permission to transition, and the buyer wants to work with you, make sure that the, that you are clear about the compensation in paragraph eight for the services that you're providing for the seller, as well as the broker compensation as it is defined in paragraph ten.

And make sure the parties are clear about the compensation, who is paying, and who, has promised to pay what amount. Make sure that you have emphasized this last point. It is in the agreements. But make sure the parties are clear that the broker may receive separate compensation from, the buyer for services rendered to the buyer by the broker.

So, it is possible that you may be receiving compensation from multiple sources in the transaction. And any time that's the case, you know, obviously, you want to consider transparency and disclose, disclose, disclose. Remember article seven of the Code of Ethics. In a transaction, Realtors cannot accept compensation for more than one party, even if permitted by law, without disclosure to all parties and the informed consent of the clients, or the customers.

00:56:59:27 - 00:57:23:15
Speaker 1
So, make sure that you are disclosing to all the parties where that compensation is coming from now, so that that deals with the in-house transaction. Let's talk about advertising, because that is a place where we, subject that we get a lot of questions about. Now, I've already specified can I have an offer of compensation in the MLS?

So, a lot of brokers are saying, well, where can I have an offer of compensation? And one of the common places that we are hearing what brokers may elect to have offers of compensation is on their website. And there is there is confusion because the settlement speaks to the fact that you cannot, create a mechanism to advertise offers of compensation if there is an IDX feed or a, a VOW feed that supports that mechanism.

And so brokers have asked us, well, Juana, can I still put offers of compensation on my, my website if I'm getting properties, from a feed onto my website and NAR has specified yes, you can. You may augment your website with these offers of compensation to buyer’s broker, but only on your listings, on your website, not on any of the properties that you received information on from that feed. Okay. So just because you get a feed doesn't disqualify your website as a viable option for displaying offers of compensation. You may still do so for your own, listings. And is there somewhere else, Juana, I can display compensation? Sure. On signage, you could, I've even had members say to me that the compensation agreements, they intend to perhaps distribute those at an open house, or at showings so that this kind of invitation to negotiate compensation, is available to buyers, agents, buyer’s brokers do these compensation agreements when they come to the property and bring their buyer, they see that the seller is willing to pay compensation, or the buyer's broker is willing to pay compensation as a result of the, buyer, the compensation agreement that is present at the property. So that may be something that you want to consider as well. One thing that I do want to caution is this idea of blanket statements on the website or some other vehicle, the purpose of the settlement is to to negotiate transactions.

Having a blanket statement on your website, for a blanket offer of compensation to buyers brokers would seem to undermine the purpose of negotiating compensation with each customer. If the seller is supposed to approve offers of compensation being extended for their listed property, and a blanket offer of compensation on your website seems to rub against the idea that the seller has, on an individual basis, had a discussion with you and approved offers of compensation of an amount appropriate for their listing.

When your website or your office policy or your, materials always list a blanket offer, that you are extending to, other brokers. So please make sure that you are remembering that the purpose of the settlement is to have a individual conversation with your buyer or seller about the appropriate conversation, compensation for their transaction, and the services that you are providing for them.

All right. So Juana, are we doing all this? But is anybody really going to pay attention to this, to these disclosures, to where compensation is offered, to whether or not I have written agreements and whether or not my written agreements comply with the requirements? The answer is yes. Just like clear cooperation or other rules of the Multiple Listing Service.

The Multiple Listing Service has been tasked with the enforcement of the settlement requirements. And so I would encourage you to speak to your multiple listing service because not only are they creating rules to address whether or not concessions are going to be required, whether or not, how what day they're going to turn off fields for offers of compensation.

They are also creating, rules to address the enforcement of the, requirements of the settlement. And so if you are not in compliance, your MLS has likely already, created the enforcement or the penalties, associated with not complying with this settlement. So please speak to them about what that looks like. Now, what if a listing agent refuses to show property?

If they don't show me that they have a written agreement, Juana, I know it's up to the MLS to enforce it, but if they don't show me that they got one, I'm not going to let them see my property. Well, first of all, is that really in your sellers best interest? Remember now you got a seller here. Who, who's, who's had they have their property listed.

This buyer's here with their agent. I'm not really sure that it's up to you to enforce that rule. And just think about 3 - 10. You have a duty to cooperate. You know, so make sure that you are, fulfilling your article three obligations. You want to share information on listed property. You want to make the property available to other brokers to show, there's a, I suspect, going to be a lot of code of ethics discussion in the future about who can see these agreements, these compensation agreements, buyer agreements, listing agreements.

There's not a ton of clarity right now about those things, but, I suspect there may be a lot of discussion in the future within, the industry as to who may be entitled to that information in the future. But just remember your article three obligations and all of this. And what is in the best interest of your customer.

Now, Juana, and what if I just put it in the remarks? If I put the offer of compensation in the market remarks or some other cute phrase to kind of get around the requirements of the settlement, I would say, as much as I love creativity, this is not the time to be creative. The remarks section should not be used to extend offers of compensation.

You know, it's something like call before showing the property might be okay, but some of these other really key things like buy a broker friendly, I'm not sure I'm going to endorse any of those things. So just make sure that you, you know, that you should not be using the remarks section to extend offers of compensation either.

Just to kind of make sure that we're not being too cute, when we create these fancy phrases to try to get around the, the settlement. All right. Now, what if I'm a sales associate? Can I put it on my website and not my broker's website? Yes, you can, if your office allows, allows you to display the, the properties on your website.

You can. If you are a team, you can always comply with FREC requirements for advertising. But certainly, you too can put that listing on your website as long as your broker authorizes it and the offer of compensation as well. All right. Now, what is NAR's policy regarding concessions? They said I can offer concessions for compensation. They said I can, give them an amount that they can use for it.

But remember, you can't condition the receipt of the concession on the payment, of the, the buyer's broker. So you give them the pot of money if they want to use it to pay their agent or their broker, they can. But you can't require it. Okay. And, it is not it is not the intent of the concessions, language in the settlement to make the concessions, the substitute for buyer broker compensation.

That is not the intent. So what, what I would encourage you to do is check with your local Association. Excuse me, check with your MLS, because they have really the jurisdiction to decide how this is going to work in their area. Some of them are allowing a, field to say yes or no to concessions. Some are allowing you to state that, you know what it's for.

Some may allow you to give an amount, but ultimately, NAR is not dictating that they're leaving that up to local discretion. So if the seller puts the concession in the MLS, is it binding? Well. Here's the thing. Again, you want to check with your local MLS about how the seller will communicate the concession. We have tried to provide you some, cover, so to speak, by putting the concession in the multiple listing.

Excuse me? In the exclusive right of sale listing agreement. The seller is specifying, as you recall in that listing that there is a amount, that they will agree to in terms of concessions. So that there is at least a good faith manifestation in a contract, where a seller is saying, yes, I am agreeing to pay concessions up to this amount.

But ultimately, if the seller is going to be bound by some concession amount, particularly in terms of bound to the buyer, then it really needs to be memorialized in the sale and purchase contract, that the seller and the buyer signed before the seller is well and truly bound to pay those concessions. So just remember that. Now, in the few minutes I have left, I think it's important for you to realize that there are I mean, there is an abundance of tools out there, many of which we have, created for you, but some NAR has created as well.

And these are changing. You saw on the frequently asked questions there are some dates, right. Well, I'll say add it on this date because it is changing rapidly. And so I'd encourage you to please consider, there is, Florida Realtors® page devoted solely to the Nar settlement. Visit it frequently. Any tool or resource we have created for you is there, the red line version of the contracts and the forms there?

It's there so that you can see exactly what has been changed and train on that. Educate yourself on that. It's very helpful information. We have free webinars, and you can find information there. Some of them are available for CLE, others like the one that Patti Ketchum is doing tomorrow is not, for CLE, but it's still good information to help you really drill down and understand, some of the, the nuance of these practice changes from a practitioner's perspective.

You know, we're lawyers, and I like to think we kind of sort of understand what it's like for you all. But, you know, it's good sometimes to hear it from the practitioner. NAR has a resource page. They have given us some really kind of specific, information broker to broker agreements 101. That means really drill down helpful resources. Written buyer agreements 101. Understanding and navigating upcoming practice changes. Summary of MLS changes, settlement fact sheets. And again, these frequently asked questions in both English and Spanish to help you really see all of the different categories, associated with this settlement and the questions and answers that we feel are very helpful. The NAR settlement timeline. How does this all play out?

Juana, when will this be final? When is the court going to wrap all this up and tell us that this is the end of this settlement negotiation? It's all here. You can see on the timeline that they've developed for you, home sellers, what do they need to know? Home buyers. What do they need to know?

And finally, if you're one of those people like me, you just need to see it on video. You need to hear it. There are a number of, Window to the Law videos that NAR has developed for you. If you need to read about it, there are some articles there for you to read. And if all else fails, it is our absolute pleasure to be able to talk to you one on one

at the Florida Realtors®  legal hotline at (407) 438-1409. We've had some of our best and brightest on this call live chatting, answering your questions. As we've, we've conducted this webinar today, the attorneys, are working really hard to try to provide you the answers, whether it's live on this webinar or on the phone.

Because we know you need more information. Simultaneously to providing those answers, we will continue to offer you the resources that you need, in the in the form of, of additional documents, forms, webinars. We'll continue to bring you that information. And I just want to say really quickly, like, listen, I, I am I told you all it's the honor of my life, my career to be able to serve as your Florida Realtors®  General Counsel.

But I listen, I get to sit here and deliver all this great information. I promise you, I don't work a camera. I promise you, I don't post to the website. I promise you, I don't register you on the for the meetings. I, I, I, I get to sit in front of the camera. But this is a a a team effort of a lot of very hard-working professionals at Florida Realtors who are committed to helping you, make this pivot, helping you, transition to this post NAR settlement world.

So I want to thank everybody that you don't see, who helped bring these webinars, these resources to you, to, to make sure that you have the things that you need. I hope that it's starting to take shape. I hope that the additional resources, the forms that we bring you this week, next week, the webinars that we will host for you, about those forms that it will help to start connecting the dots and putting the pieces together for you.

We are going to host two sessions at, Convention related to the settlement. By then, all of the forms will be out, and it is my hope that, by then, we will see the big picture of what it's going to look like in this post settlement world. We are, we are, we are, we are prepared for, whatever this next phase of the real estate industry brings.

You all are resilient and incredible hard-working professionals, and you help people achieve the American Dream. I have absolutely no doubt that you will survive this pivot. So thank you for all you do. Thank you for joining us today, and thank you for your patience as we bring this recording and these slides to our website in the coming days, because it will take us a few days.

In the meanwhile. You all have a fantastic week and I hope that all of you impacted by Hurricane Debbie, are safe. And if not, make sure you check the website for the Florida Realtor Disaster Relief Fund. Have a wonderful day.