BROKER RISK MANAGEMENT
WEEKLY PRACTICE TIP
Broker Risk Management held a webinar regarding CAR’s new and revised forms on June 3, 2024. The following are questions and answers arising from that webinar:
QUESTION: I am concerned about collecting personal financial information given the multitude of privacy laws. How do we reduce that risk?
ANSWER: The Buyer Financial and Personal Information Form (“BFPI”) is an optional form. It was written by CAR to give agents tools to work with buyers and establish a closer trusting relationship. However, if you do not feel the BFPI form fits within your buyer presentation, you do not need to use the form. If you choose to use the form, please ensure that you protect its privacy and that the form is kept secure on your system.
QUESTION: Regarding the Open House Visitor Non-Disclosure Agency Disclosure (“OHNA”), how do I handle this if I am not the listing agent?
ANSWER: If you are holding the home open and you are an agent with the listing broker, you handle it the same way as the listing agent – you ask that the OHNA disclosure form be signed by all visitors.
QUESTION: Regarding the OHNA, I understand that it is recommended but it is not the law. Can you confirm?
ANSWER: While the OHNA is not a required form, it is strongly recommended. Notwithstanding, the answer is somewhat complicated. See the CAR FAQ on the subject at https://www.car.org/en/aboutus/mediacenter/news/-/media/F7A8979125D44A4885B1F5877F2692E1.ashx
You must log on to car.org to view this FAQ.
QUESTION: When do the revised forms come out?
ANSWER: The scheduled release of CAR new and revised forms is the week of June 24, 2024.
QUESTION: If my listing is not sold after 24 months, can I write a new listing agreement and market the home for an additional time not to exceed 24 months?
ANSWER: Yes.
QUESTION: I understand that offers of compensation to buyers’ agents will soon not be placed on the Multiple Listing Service (“MLS”). However, can an offer of compensation be advertised on internet sites or other sources?
ANSWER: Yes. Once an MLS has implemented the requirements of the NAR Settlement Agreement (no later than August 17, 2024), offers of compensation to buyer’s agents cannot be placed on the MLS, nor on (a) sites related to the MLS, nor on (b) in documents or sites linked to the MLS (i.e., disclosure.io). However, offers of compensation can be placed on flyers, signs, websites or other advertising and marketing materials.
QUESTION: What if the seller advises the listing agent when signing a listing agreement that the seller declines to offer to pay the buyer’s agent a commission, but later changes their mind. How is this documented?
ANSWER: A modification of a listing agreement can be prepared. If the seller agrees to offer a commission with regard to a specific transaction, that offer of compensation can be included in a counteroffer.
QUESTION: Do we provide management with the sign-in forms from our open house?
ANSWER: If the OHNA is used, it should be included in your transaction file for review by management.
QUESTION: What if the buyer representation agreement expires before the end of your escrow? Does a new representation agreement have to be signed?
ANSWER: No. Once an agreement regarding buyer broker compensation has been signed by both parties to that agreement (i.e., CBC, SPBB or Counter-offer) and a Residential Purchase Agreement is executed, you should be paid your commission at the close of escrow, so long as the BRBC was in effect at the time the RPA is consummated.
QUESTION: Once the NAR Settlement changes are in effect, how will we address offers of compensation with new construction subdivision sales as the developers have their own contracts?
ANSWER: For new construction of 5+ unit residential subdivisions, which are subject to review and approval by the California Department of Real Estate, agents must use the purchase contracts which were submitted to, and approved by, the DRE. In those instances, offers of compensation are generally established by the seller and will likely be marketed separately or advertised by the seller. Those offers of compensation will likely be handled the same way as they have traditionally been handled – the builder has an established policy of cooperation with the local brokerage community and agrees to pay agents on their own forms in accordance with that policy.
NOTE: BRM will be replaying the webinar on Monday, June 10, 2024 at 9:30 AM. Zoom invites were previously sent out. Please contact [email protected] if you did not receive an invite and wish to participate in the webinar.
The PowerPoint slides have now been posted to the BRM website.
WEEKLY PRACTICE TIP: DO NOT FORWARD TO CLIENTS. This Weekly Practice Tip is an attorney-client privileged communication for the exclusive use of clients of Broker Risk Management and their agents. It may not be reproduced or distributed without the express written consent of Broker Risk Management LLP. The advice and recommendations contained herein are not necessarily indicative of standards of care in the industry, but rather are intended to suggest good risk management practices