At the beginning of 2024, CEO Leo Pareja did not expect Exp Properties would find itself dabbling in the real estate forms business, but eight months into the year, things look a little different.
March 2024, national association of realtors (nar) Resolved a National Council lawsuit and agreed to several business practice changes, including requiring buyers to sign a broker representation agreement before going on a home tour with a broker. As the clock ticks down to the August 17 implementation deadline for these changes, brokerages like eXp are getting their tables in order.
Pareja said that as the country’s largest brokerage firm by trade side in 2023, it made sense for eXp to create its own table.
“We’re now 17 days away from the implementation deadline, and many states haven’t even released their forms yet, and the forms that have been released are still very confusing according to the government’s regulations. Consumer Federation of America (CFA) and agents comment,” Pareja said last week.
“I didn’t wake up this year thinking we’d be in the form business, but when we realized we weren’t that far away and we had nothing, we knew we didn’t want to be in a post-August 10 situation. 17 We did it for ourselves and our Agents create liability, so we have to do something to protect our agents in the field if no one else is willing to do it.
In response, eXp created six formats. These include the Exclusive License and Right to Sell Agreement; the Real Estate Listing Agreement Amendment; the Seller Direct Indemnity Form; the Single Property Buyer Broker Agreement; the Buyer Broker Representation Agreement; and the Non-Representative Disclosure and confirmation form.
Holly Mabery, eXp’s senior vice president of operations, said that in addition to the liability reasons outlined by Pareja, logistical issues prompted the company to create its own form.
“We chose to write our own forms because, number one, we are a national company and state forms are generally protected by copyright. You cannot use the forms unless you are a member of the association, so carrying the forms across state lines is not appropriate Yes,” Marbury said.
sideAnother company with a nationwide presence has also chosen to create its own buyer representation agreement.
“I think we were one of the pioneers on this, and after understanding the announcement, its impact and how it should be productized, we almost immediately built a new buy-side agreement in the Side brokerage app,” said Steve Capezza, president of the company. .
“So all agents on the Side platform will have access to buyer agreements over the course of a few months, with the goal that when August 17 comes, our partners and their agents will be fully equipped on how to handle clients and set up the appropriate Moving forward. We largely take our cues from state associations, so in California, for example, the format of our roasting reflects that to a large extent. California Association of Realtors guide.
Like eXp and Side, @properties Christie’s International Real Estate I also decided to use forms to strike out on my own. All 16 of the company’s managing brokers worked with legal counsel to create the form, with the goal of ensuring “the agent’s voice is represented” in discussions.
“We did feel strongly that we needed to create our own form. Association forms tend to be one-size-fits-all, so they often include Lots of additional languages. “We wanted to create a more streamlined form that took into account all the legal requirements for NAR rulings, while also using language that our attorneys are familiar with and that our clients find easy to understand. “
While some brokerages choose to forge their own path, others stick with the forms provided by the state association of REALTORS or local MLS.
In Iowa, buyer representation agreements have become mandatory as of July 1, so attorneys Peter Voss and his firm, 3% listed companies., decided to use a table created by the national trade group.
“The Iowa Association has been very vocal in saying they are going to start sending out forms and then want a lot of feedback from their agents on what they like and don’t like so they can revise them and come up with something the agents are happy with. form,” Voss said. “The good thing, though, is that they’re open to it, which means the form is required by law to have certain disclosures and protocols, but we can make it ourselves if we want.”
Likewise, Ryan O’Neill, RE/MAX ADVANTAGE PLUS– Brokered Minnesota Real Estate Team, also currently plan to use the forms promulgated by their state associations. But unlike Voss, he and his agent didn’t get a draft of the new form until last week.
O’Neill said that as of today, Minnesota association forms still include the option to use cooperative compensation between the listing agent and the buyer’s agent, but that’s not the only option for consumers.
“Cooperation compensation is still on the form, so the listing broker can still share the commission on the form, but the seller can also indicate on the form that they want to pay the buyer directly or not at all,” O’Neill said of the country’s listing agreements. “So if sellers want to pay a buyer’s premium, they have options.”
Donny Samson, Virginia Sensen Real Estate It was also noted that his company will utilize forms created by associations in the states where it operates.
“I think it would be effective to use what they provide. We allow agents to modify the form or the language if they think it’s better for their business,” Samson said. “All our associations have spent a lot of time and expertise trying to comply with the rules and provide us with the appropriate forms. We think this will help us in the market because we are reading the same musical works as everyone else .
But for some companies, strictly using national forms or creating their own forms isn’t the right option, so they try to strike a middle ground.
exist real brokerageThe company operates nationwide and President Sharran Srivatsaa said the company doesn’t want to get into the forms business at the moment but will if agents and brokers feel it’s necessary.
“Our philosophy on this is that we want states and local agencies to create the right tools for agents to implement in their markets,” Srivasa said. “We also believe that the iteration being launched now will not be the version they ultimately retain.
“A few weeks ago, the state of Indiana put out the forms, we trained our agents, and then they withdrew those forums, so we’re going to have to train again.”
Despite Real’s reluctance, the company rolled out Forms in six states on Aug. 14. Markets: Ohio, Kentucky, and Louisiana.
“If states don’t step in and create the forms, or the forms they create create problems for consumers, we’re going to have to step in and create the forms,” Srivasa said.
The scale is much smaller than Real, Times American Real Estate — a 15-agent agency based in Montana — is considering a similar move. Associate broker Brian Huskey said he is currently frustrated by the lack of information and guidance from the agency. Montana Association of REALTORS.
“We received a draft form from the Montana Association last week, but it sounds like they won’t be dropping the actual form until the 15th or close to that date, and by then we’ll have to play catch – because we You get a form and you have to use it the next day,” Huskey said.
Husky’s companies and agents are also licensed in neighboring North Dakota, which sent out forms early on, he said.
“Based on what we see from Montana and how the North Dakota form performs, we may create an internal company forum based on those two forms because North Dakota has done a great job laying out the protocols very clearly. , so both agents and consumers can fully understand what they’re agreeing to,” Huskey said. “Creating internal forms takes time, and we need to know what we’re going to be allowed to do, so we don’t want to get ourselves into trouble for the forms we create.”
Real Estate Brokers and PropTech Companies flying house It is also taking a thrilling step into the form field. While the company is using forms provided by the state associations and MLSs in which it operates, it has created its own addendum for those forms.
“There’s been a lot of internal debate about this and it’s still ongoing, so it’s not fully resolved yet, but we’re pretty sure there’s a near-term path for our own agents,” said Chief Strategy Officer Adam Hopson of Flyhomes.
According to Hopson, the plan includes utilizing forms provided by the local MLS and Realtors Association, as well as an addendum that Flyhomes developed with a team of legal experts.
The addendum focuses on five points, including that the Flyhomes agent who signs the form with the buyer will represent them; that the addendum plus other forms constitutes the complete agreement; how much the agent is paid; and the fact that they can obtain information from the buyer, seller, builder, listing Brokerage firms or some combination of these sources receive compensation.
Additionally, the addendum states that unlimited home tours are part of the agency’s services and that either party may terminate the agreement at any time. The company noted that the content of the addendum supersedes any content in any state or MLS form that may conflict.
“In terms of compliance, that’s really what drove our decision to go with the MLS form, rather than trying to come up with a form that would work in all jurisdictions,” Hopson said. “We thought the local form plus an addendum would be the simplest , the most direct approach, it also helps increase transparency with customers.”
Forms have been a hot topic of debate as brokerage firms and REALTORS associations prepare for changes in business practices. For example, the California Association of Realtors’ buyer representation and listing agreement was called “unreadable” by the CFA, leading the association to launch a formal challenge. Ministry of Justice.
The bottom line, however, is that whether they’re ready or not, brokerages and associations will find out in just over a week whether their tables will cut it.
