{"id":2849,"date":"2024-08-19T21:04:25","date_gmt":"2024-08-19T21:04:25","guid":{"rendered":"https:\/\/brokernadir.com\/?p=2849"},"modified":"2024-08-19T21:04:25","modified_gmt":"2024-08-19T21:04:25","slug":"critical-information-for-homebuyers-and-home-sellers","status":"publish","type":"post","link":"https:\/\/zentricstudio.smtgamma.com\/index.php\/2024\/08\/19\/critical-information-for-homebuyers-and-home-sellers\/","title":{"rendered":"Critical information for homebuyers and home sellers"},"content":{"rendered":"

This article outlines specific changes that Northwest Multiple Listing Service (NWMLS) is implementing by revising its forms and Rules on buyer brokerage compensation and the options available to sellers. These changes clarify and simplify these provisions. Here is that Critical information for homebuyers and home sellers.<\/span><\/p>\n

Real Estate transactions involve a great deal of paperwork. Whether buying or selling, you will complete and sign several forms. At the core of every real estate transaction is an offer to purchase that converts into a Purchase and Sale Agreement (P&S) when mutually accepted. Numerous addenda accompany this P&S. The revisions are in the P&S and some of these appendices. <\/span><\/p>\n

BN Real Estate<\/a> is committed to keeping potential and current clients fully informed. Consumers must be fully aware of every aspect of their acquisition. I often say to my clients that <\/span>I want to deal only with informed clients, and if they are not informed, we will ensure they become fully informed.<\/span><\/em> I have written this article with that approach in mind. The writer is making the same information available to consumers as is available to brokers. If you require further clarification, please reach out.<\/span><\/p>\n

Information for homenuyers and home sellers regarding various rules revisions<\/span><\/h2>\n
    \n
  • Seller Offer of Buyer Brokerage Firm Compensation<\/span><\/strong><\/li>\n<\/ul>\n

    Rule 101, which deals with <\/span>compensation<\/span><\/strong> paid by the seller, has been revised to clarify that any seller’s compensation offer may be entered as a dollar or percentage amount, “request an offer” to invite buyers to submit a request for buyer brokerage compensation, or “none” if the seller declines to offer compensation and does not intend to pay buyer brokerage compensation.<\/span><\/p>\n

      \n
    • Additional Compensation for Buyer Brokerage Firm<\/span><\/strong><\/li>\n<\/ul>\n

      The current revisions eliminate the provisions of Rule 104 (<\/span>Additional Compensation for Buyer Brokerage Firm<\/span><\/em>) related to buyer broker bonuses and soliciting higher compensation than offered in the listing.\u00a0 Those provisions no longer apply to the framework of the new forms.\u00a0<\/span><\/p>\n

        \n
      • Clean-Up and Modernization Revisions<\/span><\/strong><\/li>\n<\/ul>\n

        Rule 99 (Arbitration) will be revised to make it consistent with Bylaw 14 (Arbitration), and Rule 100 (Penalty Loss of Compensation) will be deleted, as other recent Rule changes to decouple compensation make that Rule irrelevant.\u00a0 Finally, to simplify references to any seller’s offer of buyer brokerage firm’s compensation, a defined term “Compensation Offer” will be used throughout the Rules and “variable buyer brokerage firm compensation” will be referred to as “variable Compensation Offer.”\u00a0<\/span><\/p>\n

         <\/p>\n

        Forms and Rules Revisions related to Offers of Compensation<\/span><\/h2>\n

        A few revisions stem from the National Association of Realtors (NAR) policy changes arising from NAR’s proposed settlement agreement in the national class action litigation. NWMLS is not affiliated with NAR. However, its policy changes impact many NWMLS brokers who must comply with specific changes in broker practice<\/i><\/span>.\u00a0 NWMLS is making changes to facilitate broker compliance with those practice changes and ensure consumer transparency. This is information for homebuyers and home sellers.<\/span><\/p>\n

          \n
        • Revisions to Listing Agreements and Related Forms<\/span><\/strong><\/li>\n<\/ul>\n

          The listing agreements<\/span><\/strong> (<\/span>Form 1A and Form 1B<\/span><\/em>)<\/span><\/p>\n

          It will continue to include a section to give a seller the option to offer compensation to the buyer brokerage firm (“Seller’s Offer”). The buyer’s brokerage firm compensation section has been revised to clarify a seller’s various options using distinct checkbox options. The options are:<\/span><\/p>\n

            \n
          • Offer a specific dollar amount or percentage as compensation <\/span><\/li>\n
          • Invite buyers to submit a request for buyer brokerage compensation <\/span><\/li>\n
          • Check the box marked <\/span>none<\/span><\/em><\/strong> to indicate that the seller does not intend to pay any buyer’s brokerage compensation.<\/span><\/li>\n<\/ul>\n

            In addition, the seller’s advance consent to any compensation sharing between firms is deleted. Under the new policy, any compensation paid by the seller to the buyer brokerage firm will be paid directly by the seller, not by the listing firm, as has been the case in the past.<\/span><\/p>\n

              \n
            • The Listing Agreement Addendum <\/span><\/strong>(<\/span>Form 1C<\/span><\/em>)\u00a0<\/span><\/li>\n<\/ul>\n

              This revision removes the Seller’s Offer provision. It is no longer required. However, the form will continue to include the provision that there are no standard compensation rates, that compensation is entirely negotiable and not set by law, and that offering compensation to a buyer brokerage firm is not required.\u00a0 Similar to the changes to the listing agreements, the Seller Representation Agreement (Form 47) is revised to delete the seller’s advance consent to any compensation sharing between firms and to make other clean-up revisions.<\/span><\/p>\n

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              • Buyer Brokerage Services Agreement<\/span><\/strong> (<\/span>Form 41<\/span><\/em>)<\/span><\/li>\n<\/ul>\n

                The “Compensation” provision<\/span><\/strong> (Section 5), where a buyer and buyer broker agree to the buyer brokerage compensation amount, is revised to clarify that the buyer brokerage firm may not receive compensation that is greater than the amount agreed to in Form 41 or any subsequent amendment to Form 41.\u00a0 Buyer and buyer brokerage firm must agree to a specific compensation amount based on the buyer brokerage services, not the amount a seller may offer. If the buyer and buyer broker agree to a different amount later, Form 41A will be used to amend the compensation amount. Section 5 is also revised to add an option for the buyer and buyer brokerage firm to negotiate a different compensation amount if the broker represents the buyer in a transaction where the seller is unrepresented (FSBO).<\/span><\/p>\n

                The “Seller Compensation Offer” provision <\/span><\/strong>(Section 6) has been simplified. It now provides that any Seller’s Offer will be stated in the purchase agreement, that the buyer may request that the seller pay the buyer broker compensation as part of the buyer’s offer and that the buyer will pay any amount not paid by the seller.\u00a0<\/span><\/p>\n

                The “Compensation Terms” provision<\/span><\/strong> (Section 7) deletes the buyer’s advance consent to any compensation sharing between firms.<\/span><\/p>\n

                The “Showings, Listings, VA Financing” provision<\/span><\/strong> (Section 8) has merged under “Compensation Terms” (Section 7) and revised as follows:<\/span><\/p>\n

                  \n
                • “VA Financing” is updated to provide that the VA regulations <\/span>may<\/span><\/em> require (rather than<\/span> is<\/span><\/em> required) compensation to be paid by the seller.<\/span><\/li>\n
                • The “Listings” provision is revised by removing the “exceptions” line from the buyer broker’s obligation to bring all listings to the buyer’s attention regardless of any Seller’s Offer amount. \u00a0\u00a0The buyer broker must not “filter” search results based on Seller’s Offer.<\/span><\/li>\n
                • The “Showing Properties” provision has been deleted because the buyer agrees to pay any buyer brokerage compensation not paid by the seller; this provision is no longer relevant.<\/span><\/li>\n<\/ul>\n

                   <\/p>\n

                  Information for homenuyers and home sellers regarding Purchase and Sale Agreements<\/span><\/h2>\n

                  The purchase and sale agreements<\/span><\/strong> (Forms 20, 21, 23, 25, and 28) have been revised to simplify buyer brokerage compensation disclosures and negotiations.<\/span><\/p>\n

                  \u2013On page one, the term “Buyer Brokerage Compensation” is revised to display both the “Seller’s Offer” (if any) and the “Amount to be Paid by Seller.”\u00a0 A buyer’s offer must have both fields completed.\u00a0<\/span><\/p>\n

                  \u2013The “Seller’s Offer” field is a disclosure required by RCW 18.86.030(1)(g)(ii) to ensure that the buyer is aware if the seller has offered compensation and the amount of any such offer.\u00a0 The “Amount to be Paid by Seller” field indicates the amount the seller will pay the buyer brokerage firm. This field must be completed regardless of whether such amount matches the Seller’s Offer or is different.\u00a0<\/span><\/p>\n

                  \u2013Because <\/span>the amount to be paid by the seller<\/span><\/em> will be negotiated on the first page of the purchase and sale agreement, the checkboxes for “Pay as Offered” and “Other- See Addendum” have been deleted.\u00a0 If the Seller’s Offer is greater than the amount to be paid by the seller, in that case, the buyer may request that the difference be applied as a credit to the buyer by selecting a new checkbox, “Addendum for Buyer Credit” and attaching the revised Form 41C (discussed below).<\/span><\/p>\n

                  \u2013The purchase and sale agreements have also deleted the parties’ consent to share compensation between firms.<\/span><\/p>\n

                  \u2013The addendum used to address compensation offers to buyer brokerage firms when using a non-NWMLS purchase and sale agreement (Form 41E) has been revised to incorporate the same substantive changes made to the purchase and sale agreements.<\/span><\/p>\n

                   <\/p>\n

                  The<\/span><\/strong> Addendum for Buyer Credit<\/span><\/strong> (Form 41C) has been revised, simplified, and renamed as <\/span>Addendum for Buyer Credit<\/span><\/em>. This addendum will be used solely to address a credit to the buyer. When the amount of buyer brokerage firm compensation to be paid by the seller is in the purchase and sale agreement, Form 41C will no longer be used for the buyer to negotiate buyer brokerage firm compensation adjustments. Instead, the buyer may use Form 41C to request a credit from the buyer if the Seller’s Offer is greater than the buyer’s brokerage compensation. This form removes all buyer brokerage firm compensation adjustments, creating a new “credit to buyer” provision.<\/span><\/p>\n

                  The Escalation Addendum to Purchase and Sale Agreement <\/span><\/strong>(Form 35E) clarifies that the “Net Price” shall be adjusted for any credits to the buyer or seller.\u00a0 “Credits” are for closing costs, concessions, and broker compensation.\u00a0 This definition will be used in calculating the new purchase price in Section 4.<\/span><\/p>\n

                  Listing Input Sheets <\/span><\/strong>have been revised to make the following fields optional: Buyer Brokerage Compensation, Compensation Type, and Tail Provision.\u00a0If the seller offers a specific amount of compensation, the tail provision field must be filled in.\u00a0 <\/span><\/p>\n

                   <\/p>\n

                  I have written this article for the benefit of brokers and consumers. Consumers may need help understanding various forms and what is in those forms. Buyers and sellers will use these forms when engaging in a real estate transaction. Bookmark this article to refer to information for homebuyers and home sellers later.<\/span><\/p>\n

                   <\/p>\n

                   <\/p>\n","protected":false},"excerpt":{"rendered":"

                  This article outlines specific changes that Northwest Multiple Listing Service (NWMLS) is implementing by revising its forms and Rules on buyer brokerage compensation and the options available to sellers. These changes clarify and simplify these provisions. Here is that Critical information for homebuyers and home sellers. Real Estate transactions involve a great deal of paperwork. […]<\/p>\n","protected":false},"author":3,"featured_media":2850,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4,6],"tags":[],"class_list":["post-2849","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-footer-blog","category-real-estate-info"],"_links":{"self":[{"href":"https:\/\/zentricstudio.smtgamma.com\/index.php\/wp-json\/wp\/v2\/posts\/2849","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zentricstudio.smtgamma.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zentricstudio.smtgamma.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zentricstudio.smtgamma.com\/index.php\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/zentricstudio.smtgamma.com\/index.php\/wp-json\/wp\/v2\/comments?post=2849"}],"version-history":[{"count":0,"href":"https:\/\/zentricstudio.smtgamma.com\/index.php\/wp-json\/wp\/v2\/posts\/2849\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zentricstudio.smtgamma.com\/index.php\/wp-json\/wp\/v2\/media\/2850"}],"wp:attachment":[{"href":"https:\/\/zentricstudio.smtgamma.com\/index.php\/wp-json\/wp\/v2\/media?parent=2849"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zentricstudio.smtgamma.com\/index.php\/wp-json\/wp\/v2\/categories?post=2849"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zentricstudio.smtgamma.com\/index.php\/wp-json\/wp\/v2\/tags?post=2849"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}