Q. Can a seller ask to see a buyer representation agreement? A. While they can ask for it, it has no bearing on the offer presented and it is not recommended that you share this agreement. This is a contract that contains client information on negotiated compensation packages with your firm, terms and commitments of service, and duration of the exclusive relationship, among other things. Much the same way you wouldn’t offer a competitor a copy of the Exclusive Right to Sell agreement to help buyer‘s agents understand the seller’s agreed upon compensation or terms with their broker. We consulted with the MAR legal counsel and they wouldn’t recommend releasing a private client agreement to anyone, especially without the broker’s consent at minimum. Additionally, if a Broker is considering this, they may need to seek legal counsel guidance on whether or not they must receive the buyer‘s consent before providing a third party with the contents of a private, contractual agreement.
Q. Should I submit my agency disclosure form with my offer? A. Some have asked about providing a copy of the Mandatory Consumer Licensee Disclosure form instead. Many members provide this form as a matter of courtesy to the listing broker when asked, or with an offer. While helpful and not discouraged, that document cannot be compelled by a third party either. Please note though that the The Code of Ethics Standard of Practice 16-10 makes it clear that REALTORS®, acting as buyer or tenant representatives or brokers, shall disclose that relationship to the seller/landlord’s representative or broker at first contact and shall provide written confirmation of that disclosure to the seller/landlord’s representative or broker not later than execution of a purchase agreement or lease.” The listing broker has a right to something in writing attesting to your role and relationship with your client, but neither confidential document specifically can be compelled.
Q. Will lawyers be asking us to provide our buyer representation agreement at closing in order to pay us? A. We reached out to the MAR counsel and conferred with Attorney Kate Berard, who offered some great clarification. In the interest of getting paid, providing the Buyer’s Agreement to the buyer’s lender and closing attorney if buyer is bringing money to the closing table, makes sense for proper accounting and authority to pay the buyer broker fee that is above and beyond what is listed in the purchase agreement or compensation addendums. If the terms of the purchase agreement & addendums satisfy the buyer’s obligations, then you do not need to share it. (some attorney’s or lenders may request it anyway.)
Q. Should there be something signed by the buyer that says the amount they agreed to pay their agents that gets sent to the listing broker and seller if we can’t share buyer representation agreement? A. As above, if the purchase agreement or addendums don’t contain all of the compensation to be paid, it should be shared. However, there is no mechanism for others, lenders, lawyers or closing attorneys to “police” that the correct amount, or amount not exceeding the agreed upon amount was paid. Failure to collect the correct amount would be and should be noticed by your client and would be a legal breach of contract agreement and outside the scope of the closing table. Think about the flip side as well… Will the closing professionals start asking for a copy of the Exclusive Right to Sell to make sure the listing broker payment of compensation matches their agreement?