by Kara McGregor, Senior Vice President; Roland Love, Attorney and Vice President; and Kaema Roberson, Vice President of Education
June 24, 2024 – As the legal landscape on agent commissions comes into focus, there are important deadlines coming fast! Brokers, it’s time to engage and lead your team into this brave new world …
Countdown to August 17…
By this date, all MLS systems must be updated to remove any offers of compensation to buyer’s agents. Some MLS systems may launch these changes earlier!
New Forms …
Brokers must decide which new representation agreement forms their agents will use. There are changes to both the Buyer’s Rep Agreements and Listing Agreements.
- Some brokerages may develop their forms (compliant with new rules).
- Some local associations are developing forms.
- Texas Realtors has new forms you can view at TexasRealEstate.com/lawsuit. As of June 24th, these forms are on Zip Forms, replacing previous versions.
- NOTE: Agents may close transactions with existing forms until August 17th. If you are using a pre-June 24th Texas Realtors form as of August 17th, you must amend it to be compliant with the new disclosure and compensation requirements. Texas Realtors has created an Amendment form to address this, or you may execute new listing or buyer representation agreements.
New Conversations …
In the day-to-day, it’s all about finding the right words when talking to clients. This is a significant moment for Broker leadership! Agents will need good scripts for how to discuss compensation legally and accurately. As of August 17th, if you use MLS and are a member of Texas Realtors, the following requirements apply:
- Buyers’ agents MUST have an updated Buyer Representation Agreement signed before showing a home and discuss the new reality that the buyer may have to pay their agent directly.
- Listing agents must use new forms as well and be prepared to discuss variables affecting their compensation and the implications of offering compensation to buyers’ agents … or not.
- Both sides must prepare their clients for negotiating agent compensation as part of the transaction and understand how their fees are handled by lenders.
- A Buyer’s Representative may not receive more than the agreed compensation unless the Representation Agreement is amended.
- Be sure to include an addendum or other agreement as part of every contract establishing compensation and who pays each portion of compensation.
We know it’s a lot. Talk to your Independence Title sales representative about your questions and concerns, and watch for our new classes on the updated Texas Realtor forms. And above all, communicate with your boards and get updates from Texas Realtors!
