The Florida Realtors organization released two compensation agreements and their related modification forms last month and with the recent changes to the Multiple Listing Service (MLS) that went active this last week, the forms have become invaluable in ensuring the Buyer Brokerage receives compensation from the Seller or Seller’s Brokerage on listings where this is a cooperating commission offered.
Prior to the removal of the commissions from the MLS, the rules for placing a listing in the MLS protected the Buyer Brokerage to ensure they would be paid by the Seller Brokerage for the correct percentage listing on the platform. With the changes in place now, an additional form is needed as a contract between either the Seller’s Brokerage to the Buyer’s Brokerage or the Seller directly to the Buyer’s Brokerage to complete the payment.
The Compensation Agreement can be executed prior to the offer for Purchase and Sale between the Buyer and Seller. It has a term by default of 30 days and is automatically extended through the date of the closing of a Purchase Agreement if one is entered into during the term of the Compensation Agreement.
There are several options on how agents may put these to use: a Listing Agent may send an introduction email that includes the proposed compensation agreement to a Buyer’s Agent when a showing of the property is requested; the Buyer’s Agent may send the proposed compensation agreement to the Listing Agent when preparing to make an offer on a property. The Seller may offer compensation directly to the Buyer’s Agent through the Seller to Buyer’s Broker form.
The compensation forms relate directly to the new listing agreement. Section 10(a) of the listing agreement relates to the amount which should be included on the Seller’s Broker to Buyer’s Broker Compensation Agreement. Section 10(b) of the listing agreement relates to the compensation that is offered directly by the Seller to the Buyer’s Broker Compensation Agreement.
Learning new paperwork requirements can be formidable. If you have questions, please do not hesitate to reach out to your trusted real estate attorney for assistance.
