Learn About the New Listing Agreements
August 9, 2024 Member Benefits, MLS Updates
The Cape Cod & Islands Association of REALTORS® has released a new listing agreement, offering brokers additional options beyond the Massachusetts Association of REALTORS® listing agreement. This update ensures compliance with the new rules under the NAR settlement.
CCIAOR leadership decided to offer an alternative listing agreement to provide additional options for brokers who handle listings and buyer agent compensation differently. This new agreement aims to offer flexibility for for listing brokers and sellers.
The main difference between MAR’s and CCIAOR’s listing agreements is that CCIAOR’s agreement does not offer an option for proactive broker-to-broker compensation or a specified compensation offer from the seller to the buyer broker. MAR’s form preserves a broker to broker offer of compensation as an option to happen off-MLS.
In short, CCIAOR leadership believes that, as an industry, we should follow the old hockey adage: ‘skate to where the puck is going, not to where the puck is. With increased regulatory attention and potential upcoming changes in the industry, CCIAOR wants to stay ahead of what we think will be future developments by updating its listing agreement. This way, we can make sure our practices stay compliant and effective.
DISCLAIMER: YOUR BROKER SHOULD HAVE A POLICY DICTATING WHICH AGREEMENT OR TYPE OF AGREEMENT YOU SHOULD USE. PLEASE DISCUSS THIS WITH YOUR BROKER. CCIMLS, MVMLS, or CCIAOR DOES NOT REQUIRE THE USE OF ANY SPECIFIC AGREEMENT. IF YOU HAVE ANY QUESTIONS ABOUT WHICH AGREEMENT TO USE, PLEASE CONTACT YOUR BROKER.
Review of MAR Listing Agreement
The MAR Exclusive Right to Sell Listing Agreement provides an opportunity for a seller to choose whether to offer broker-to-broker compensation (offered off-MLS) or no compensation at all. It does not have provisions built in for a seller offer of compensation, as that is not a binding offer, nor does it authorize a seller to offer of concessions/buyer incentives (however that could be detailed in additional provisions).
Additionally, if the broker-to-broker offer of compensation is selected, then a broker should use the addendum to spell out what that offer is and then use form 311. Form 311 is an agreement between two brokers to execute that offer with a buyer broker.
A tutorial on the MAR listing agreement.
About the CCIAOR Listing Agreement
CCIAOR’s approach to creating a listing agreement was to keep it simple, clearly spell out what the listing brokerage is to receive for listing the property, and fully inform the seller about potential seller contribution to buyer agent compensation and other potential costs so they can make informed decisions when reviewing offers.
CCIAOR Listing Agreement Higlights
CCIAOR - as the owners of CCIMLS and MVMLS - are prohibited by the NAR settlement from offering forms that facilitated broker-to-broker compensation - even off MLS. As such, there is no option for a listing broker to share part of the listing fee or offer out broker compensation on the new CCIAOR forms.
The listing brokerage compensation is what the listing brokerage earns for its services without any built-in buyer broker compensation. If a broker wants to offer broker-to-broker compensation off MLS, which is allowed under the NAR settlement, then it needs to use either the MAR listing agreement or draft its own with consultation of the broker’s legal counsel. Please consult with your brokerage about any offer of broker-to-broker compensation.
Many listing contracts are being updated with either seller offers of compensation to pay buyer brokerage fees or seller concessions offered to the buyer. CCIAOR has decided not to include a place for a specific amount of either seller paid compensation nor a specific amount for seller concessions. However, the specific amounts could be written in the ‘Additional Provisions’ section if the seller and listing brokerage believe and agree it is in the seller’s best interest to put a specific amount of buyer incentives in the MLS platform.
The CCIAOR listing agreement does include an option for sellers to agree to allow the listing broker to proactively market that the seller is willing to pay for buyer fees and costs. However leaving the box blank, does NOT mean the seller is unwilling to consider paying buyer fees and costs as they receive offers, as the agreement clearly has the seller agreeing to consider all offers on overall price and terms and that the listing broker has a duty to provide all offers to the seller.
CCIAOR chose this direction with the listing agreement for several reasons:
Seller offers of compensation are not binding until a contract to purchase is signed. Unlike in the past, when a listing broker's offer of buyer agent compensation was a binding, unilateral offer, a seller concession or seller offer of buyer broker fees is not binding. They still need to be agreed upon in the Contract to Purchase Real Estate, and as such, a seller is not obligated to accept what they offer in concessions or buyer broker fees.
A buyer broker can not collect more in compensation than what is in the written agreement with their buyer. A seller can offer any amount of compensation to a buyer broker; however, that buyer broker can not collect more than what is in the written agreement with their buyer. It is simpler to handle these requests in the Contract to Purchase rather than through a non-binding offer, which may not accurately reflect what the buyer brokerage can actually collect.
Sets Expectations with Sellers
CCIAOR believes it is important to set expectations with sellers upfront, and, together with the listing brokerage, agree to do what is in the best interest of the seller. . In CCIAOR’s listing agreement, the following occurs:
Sellers are fully informed that buyer offers may request the seller to pay buyer fees and costs, and informs sellers that buyer brokerage fees paid for by the buyer may not be financed.
Sellers agree to evaluate all offers—regardless of whether they include a request for buyer broker compensation—based on the overall price and terms, to select the offer they believe is best for them.
Listing brokers agree to submit all offers to the seller regardless of whether there is a request for buyer broker compensation or not.
The information contained on this page is not considered legal advice. You should consult your broker and brokerage attorney or contact MAR’s Legal Hotline for additional information and clarification.
