New Rules, Same Relationship

The date is fast approaching for the NAR settlement-driven changes to how offers of compensation are handled for Buyer’s Brokers. And while there has been widespread speculation that the changes spell the end of Buyer representation, I’m not so sure that much is going to change—aside from more paperwork, at least during the initial transition.

In preparation for the transition, the California Association of Realtors has issued multiple new forms along with recommended practices for Agents and their clients to use as we approach the transition date of August 17 to comply with the new requirements.

On the Buyer side, prior to showing the Buyer a property or taking them on a tour, agents will need to have Buyers sign the Broker Compensation Advisory form (CAR form BCA) which outlines the various duties and services offered by a Buyer’s Broker. This will be used in conjunction with the Buyer Representation and Broker Compensation Agreement (CAR form BRBCA) and the Property Showing and Representation Agreement (CAR form PSRA) which outline the working relationship between the Buyer and the Broker, along with the compensation associated with those services.

For listings which offer limited or no compensation, there is the Modification of Terms-Buyer Representation Agreement (CAR form MT-BR) that can be submitted to adjust the offered compensation, and the Offer to Purchase Paragraph 3G(3) of the RPA can be used in conjunction with the Seller Payment to Buyer’s Broker (CAR form SPBB) to request the Seller to pay all or part of the Buyer’s Broker compensation as part of the offer terms. And on occasion, the Buyer and their agent may replace their initial BRBCA and PSRA with a new set if the terms offered by a Seller don’t match up with their existing Buyer Broker Agreement.

On the Seller Side, agents and their Sellers will need to modify their existing Listing Agreement that currently authorizes and/or obligates the Broker to offer compensation to Cooperating Brokers through the MLS. Yes, there is a form for this as well, called the Disclosure and Modification of Listing Agreement (CAR form DM-LA), or for simplicity’s sake they can replace their existing Listing Agreement with one that uses the new version of the Residential Listing Agreement (CAR form RLA) that was issued in July 2024.

With all the new standards and forms, I am reminded of the practices and protocols that were put into effect on short notice in response to the COVID epidemic. Once everyone was able to venture out after the initial lockdown, everyone was using masks, gloves, booties and copious amounts of hand sanitizer, along with the ubiquitous PEAD form which had to be signed for every listing we showed, and life and business went on. In fact, 2020 ended up being a busier than average year, just under a new set of rules.

Once we get used to the new normal, I don’t anticipate that a pile of new forms will change the basic relationship that already exists between agents and clients. And as with many of the practices that were adopted during COVID which inspired new tools for safety, scheduling and communication, these changes may well continue to improve the standard of care within our industry.