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Upcoming Real Estate Forms Changes Part 1: Compensation

Mickey Brown May 31, 2024

The way real estate transaction are done in California is changing, and new mandatory forms will be introduced in the summer of 2024.   

Two new forms you might see are the Broker Compensation Advisory and the Buyer Representation and Broker Compensation Agreement. Here’s a quick overview of what these forms cover.

Remember, it’s important to read and understand any legal document before signing.

Buyer Compensation Advisory:
- Compensation amounts are negotiable.
- The seller agrees to pay their broker.
- The seller may allow their broker to share compensation with the buyer's broker.
- Or, the seller may decide not to offer any compensation to the buyer's broker.
- Negotiating how much each broker gets paid and who pays them is part of the process.

Buyer Representation and Broker Compensation Agreement:
- This form must be completed before any agent or broker shows you any properties.
- The maximum representation period is 3 months.
- The types of properties and locations to be shown will be listed.
- If the seller agrees to pay the buyer’s broker, it reduces the buyer’s obligation.
- If the buyer can’t pay, the purchase depends on the seller agreeing to pay the buyer’s broker.
- The buyer must provide proof of funds for the purchase deposit, closing costs, and broker’s compensation within 5 days of signing the agreement.

Later this year, Destination Real Estate will host a free webinars to answer any questions about these new forms and practices. In the meantime, feel free to contact any of our team members with your questions.


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Upcoming Real Estate Forms Changes Part 2: Listing & Purchase Agreements The way real estate transaction are done in California is changing, and new mandatory forms will be introduced in the summer of 2024. This article will discuss the Residential Listing Agreement and Residential Purchase Agreement. For sellers, the Residential Listing Agreement has been completely revised. The form is a bit longer now, primarily because it is organized in a grid format. This grid lays out all the terms in detail, making it clearer. The main changes the Residential Listing Agreement are: • More detailed info on what the seller will pay and to whom. • There is now an Optional Concessions Section where sellers can confirm if they are willing to pay Optional Concessions. Optional Concessions can cover costs like escrow and title fees, lender fees, repairs, and broker compensation. • This information will be shared on the Multiple Listing Service (MLS). • Sellers need to make sure buyers and agents have a signed Buyer Representation and Broker Compensation Agreement before showing the property (refer to this article for information on these forms). • New guidelines on how to handle buyers who do not have their own agent. The Residential Purchase Agreement also has some updates for buyers, though there are not as many. The main changes are: • Homeowner insurance is now a separate item to consider. • If the property has three or more units, the seller has to give the buyer an additional document about wooden balconies and stairs. • It clarifies who will pay the brokers compensation. Remember, it is always important to understand any legal document before signing it. If you have questions, you can contact the Destination Real Estate team. Watch for information about upcoming free webinars to explain these changes in detail.

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Upcoming Real Estate Forms Changes Part 1: Compensation

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