Forms Changes 2024: I Hear There are Some Forms Changes?

Editor’s note: PAR is offering three webinars highlighting the forms changes on July 16, Aug. 7 and Aug. 23. You can register online to attend.

We get it. There’s a lot going on right now as things gear up to implement the rule changes required by the NAR class action settlement. There’s a lot of information coming from a lot of places. A lot of forms and MLS rules are changing, which is going to affect your daily practice. And on top of that, everyone expects you to read lots of words or watch long videos to figure it all out.

This article will summarize the high points of what you need to know, so maybe things will make a bit more sense when you review NAR and PAR resources regarding these changes. But to be clear, you still need to read the details, too…

Background

So what are the rules changes at issue here? Here’s the basic outline of the required changes:

• Listing brokers can no longer make offers of broker-to-broker cooperating compensation in the MLS. Listing brokers can still offer cooperating compensation to buyer brokers and advertise it in other ways (with the consent of their sellers), but they cannot communicate that offer through the MLS.
• Sellers will not be allowed to advertise offers of seller concessions for the specific purpose of paying a buyer broker fee owed by a buyer. Sellers can still offer concessions and Brokers can advertise this general intent in other ways (with the consent of their sellers), with the final agreement between the parties recorded in a signed agreement of sale.
• Buyer brokers who belong to an MLS that’s covered by the NAR settlement are prohibited from retaining any buyer broker fee above what the buyer and buyer broker have negotiated in their agency/fee agreement, regardless of the source of those funds (cooperating compensation, seller-paid or buyer-paid).
• Brokers “working with” buyers are required to sign a written agreement with that buyer prior to touring any property.

If you keep these concepts in mind as you look at various policies, rules and forms changes, those changes may be easier to understand.

PAR has taken the required changes and applied them to our many forms. As of August 1, 20 forms are changing, two new forms are being created and one form is going away.

Told you there was a lot.

Resources

The good news is that we have some great resources available. As of now, we have the marked-up versions of the forms available on PARealtors.org. To download the marked-up versions, be sure to log into the website with your credentials, navigate to the forms pages and click the ‘Download the Marked-Up Version’ text hyperlink above the blue ‘download’ button.

As a reminder, the red text in our marked-up versions signifies text that is new or substantially amended from the prior text. Blue text signifies text that has been moved to a new location from elsewhere in a form without substantive changes. In Form BAC, you will see we have blue text in italics, which indicates the text was moved to a new location and rewritten but with no substantive changes to the concepts.

We also have a document called the Comprehensive Guidelines that does a deep dive into six of the “key forms” that are changing, including an explanation of each item that’s changing. This is the bread-and-butter resource for you as you navigate being educated on the forms. Yes, it’s long (attorneys… am I right?), but this is the key document that will help brokers and agents understand the how and the why of these changes and help you understand what you may need to adjust as you practice under these new rules.

Forms Changes

The remainder of the article will provide a very brief summary of the main changes to each of the key forms. But again, please review the detailed resources available on the PAR website before using the forms with a client (and before calling the PAR Legal Hotline with questions that may already be answered in the guidelines).

Exclusive Listing Contract (Form XLS)

The changes in the listing agreements are focused on how cooperating compensation (broker-to-broker) and seller concessions (seller to buyer broker on buyer’s behalf) are explained to the seller client, and also the ways each of them can be marketed to potential buyers and buyer agents. Neither section, cooperating compensation nor seller concessions, are required. Brokers are encouraged to consider the business model(s) that they believe will work best for them and their clients, and then train agents on the specific use of those forms to implement those models.

Exclusive Buyer Agency Contract (Form BAC)

The first thing to note is that we have now broken up the Exclusive Buyer Agency Contract and created an Exclusive Tenant Agency Contract (Form TAC). Form TAC has a lot of the same terms, just some tweaks were made for the rental side of things.

The second thing to notice about the BAC is that there are not a lot of big changes. A lot of what was required was already included, so some of the concepts were just reworded.

The last major thing to notice is language that is required by the settlement, and that is that the buyer broker is prohibited from retaining any fee that is above what is negotiated between the buyer broker and their client. This is not an “us” thing that just decided to make this addition. This is required per the settlement. Brokers are encouraged to ‘game plan’ the different ways that buyer broker compensation might be offered by a listing broker or seller and prepare agents and clients for discussions of how that will factor into fee negotiations.

Non-exclusive Buyer Agency Contract (Form NBA)

The changes for Form NBA are to match the fee provision to the agreement. The current version basically says the buyer broker will be paid whatever the listing agent is offering. The settlement language explicitly prohibits this type of fee language, so we have taken the language from Form BAC and added that fee language to cover all bases.

Notice of 2024 Practice Changes (Form NPC)

The Notice of 2024 Policy Changes is a brand new form that explains some of the policy changes to clients who are under existing agency agreements when the rules change in August 2024. This is NOT an addendum to any agreements – it is meant to help agents explain the changes and potentially set up the need for amended or new contracts. Buyer brokers are especially encouraged to review the settlement terms since most buyer agency forms signed prior to the policy changes will probably not comply and will likely need to be updated or replaced.

Cooperating Broker Compensation Agreement (Form CBC)

Form CBC required some changes since cooperating compensation will no longer be in the MLS. Brokers offering/accepting cooperating compensation should get that in writing either via this form or a similar brokerage form

Agreement of Sale (Form ASR)

In the agreements of sale, the prior “seller assist” paragraph will now be called “seller concessions,” and will have one subparagraph to negotiate concessions for traditional closing costs and a separate one to negotiate seller payment of buyer broker compensation (replacing the Compensation Addendum to the Agreement of Sale, Form CAS).

Again, we know it is a lot, but we highly encourage you to utilize the resources provided so you can be educated and knowledgeable as we enter this transition.