Massachusetts REALTORS®: Key MAR Forms Updates, Including Contract to Purchase

Beginning February 1, 2025, the Massachusetts Association of REALTORS® (MAR) has announced important updates to its forms library. These revisions aim to enhance clarity and efficiency in real estate transactions across the state.

UPDATES TO EXISTING FORMS:

• Form 501 - Contract to Purchase: This form had updated language in Paragraph 2, 'Compensation to Buyer Broker', to reflect and be clear on whether there was an accepted offer of compensation from the listing broker to the buyer broker AND to make clearer that the request is in addition to that accepted offer. Additionally, a line to name the buyer agent licensee was added to Form 501
• MAR Listing Agreements: All MAR listing agreements were updated to remove 'net' as an option for compensation.
• Form 311 - Broker-to-Broker Compensation: Changes were made to this form to add arbitration for brokers that agree to broker-to-broker compensation and to include a place to either accept or reject the offer of compensation.

NEWLY CREATED FORMS:

• Form 529 - Brokerage Information, Escrow Deposit & Commission Worksheet: This Worksheet is a tool for Members to use to capture the identifying data about the Listing Agent and Brokerage, the Buyer Agent and Brokerage, commission, and escrow information to clarify settlement procedures.
• Form 694 - Termination of Listing Agreement: Modifications have been made to clarify the terms and conditions under which a listing agreement can be terminated, guiding REALTORS® and their clients.
• Form 706 - Termination of Buyer Broker Agreement: This form now includes updated language to delineate better the circumstances and procedures for terminating a buyer broker agreement.
• Form 705 - Change of Terms of Buyer Broker Agreement: This form allows for a change of terms of buyer-broker agreements.

All of these form updates should be populated in your transaction management platform of choice.

Last year MAR added a new Compensation to Buyer Broker clause to the Contract to Purchase to allow for transparency and flexibility for both contracting parties regarding broker payment. This paragraph has been slightly revised to clarify whether there are other accepted offers of compensation:

However, remember that this is simply a place to indicate the offer and acceptance of broker-to-broker commission; it does not bind the listing broker to pay the buyer broker. For this purpose, please use Form #311, which has also been updated.

Conversely, if there is not an offer of compensation from the listing broker, or if there is an offer and the buyer broker has rejected it, the second box can be used to communicate this information between the parties.

Additionally, another update to the Contract to Purchase provides for clarification in the brokerage identification section by allowing for the inclusion of both the name of the licensee and the name of brokerage on the offer. The licensee completing the offer should fill out this section clearly identifying their role in the transaction and the client they represent.

A change reflected on all the listing agreements and buyer broker agreements, as well as the Contract to Purchase, is the removal of a “net” sale option when defining commission percentage.

MLS platforms traditionally defined “net” sale price as the gross price minus any seller concessions. Historically, commissions paid in the transaction were not deducted from the sales price offer itself; instead, they were predetermined amounts set by the seller and managed through brokerages before the offer was made, and therefore easy to compute.

Now that the Contract to Purchase has been updated to include buyer broker compensation as a term of the buyer’s offer, calculating a commission based on the “net” sale price can be imprecise as “net” sale becomes a moving target and results in unclear math.

With that in mind, the MAR Forms Content Advisory Committee approved changes to all forms removing the option for commission based on “net” sale and retaining only a gross option percentage.

If you have a transaction where utilizing the net sale price would be preferable, such as new construction, the best practice would be to use the actual dollar amount of the commission instead.

NOTE: CCIAOR's Listing Agreements still contains 'net' as an option as that listing agreement defines net for the listing commission and DOES NOT include paid buyer broker commissions in its definition of 'net'.

This Agreement memorializes the offer of compensation made by the listing broker (as agreed and directed by their seller client) to the buyer broker. As a best practice, Form 311 should be circulated between the brokers prior to submitting an offer.

The Agreement has been updated to include an arbitration provision for disputes, a space for any additional provisions, and a place to indicate acceptance or rejection. It is not required to reject the offer formally if not accepted, but is considered a best practice.

This Worksheet is a tool for Members to use to capture the identifying data about the Listing Agent and Brokerage, the Buyer Agent and Brokerage, commission, and escrow information.

As an information-sharing tool supporting the traditional transaction documents, the Worksheet identifies the property address, anticipated closing date, and the names of the seller and buyer. It then provides space to identify the Listing Broker and Seller’s Agent, Buyer Broker, and Buyer’s Agent, along with their contact and respective licensing information.

The commission section helps to set the stage for how the commission information should be reflected in the Purchase and Sale Agreement and, therefore, uses similar language:

Simple termination forms were created for Listing Agreements and Buyer Broker Agreements to provide a mutual agreement for parties involved to terminate their relationship. Each Form has a place for additional provisions.

The Change of Terms to the Buyer Broker Agreement is similar to the already existing Change of Terms to the Listing Agreement.

• Form 694 - Termination of Listing Agreement
• Form 706 - Termination of Buyer Broker Agreement
• Form 705 - Change of Terms of Buyer Broker Agreement