Subject: New and updated real estate forms and who do they benefit. This is a follow up email regarding my email from 10/03/2024 with the subject: Settlement but yet no adjustments or corrections on agent representation in a residential transaction. A copy of the email dated 10/03/2024 is attached. To: Kevin Sears, Charly Lee, Lesley Muchow As a member of the association, I am asking you to please forward this email to all the board members.

Gia Arvin (President Florida Realtors), Juana Watkins (Florida Realtors) As a member of the Florida Realtor Association, I asked for the email addresses of the board members. My request was denied. Please forward this message to all the board members of the Florida Realtors. Thank you.

Juana: I did follow your advice given during a Zoom meeting and emailed the legal hotline with a couple questions on 9/17/24. Since I didn’t hear back, I resent the message on 10/01/2024, and I copied you on it. No answer yet. A copy of the email [Email Legal Hotline] is attached. 

David Serle, Christopher Krzemien, and Greg Manship (Broward, Palm Beaches and St. Lucie Realtors, Inc.) As a member of the association, I asked for the email addresses of the board members. My request was denied twice. Most recently, via email dated 8/08/2024 at 11:08 AM: https://rworld.com/privacy-policy

Rworld does not share, sell, or trade email addresses, other than with our partners. As a member of the association, I am asking you to please forward this email to all the board members.

Cc: Department of Justice Lisa A. Scanlon, Owen M. Kendler, Samer M. Mussalam, Steven Mintz and Thomas P. Walch

Cc: Law Firms Ketchmark and MacCreight P. C., Cohen Milstein Sellers & Toll PLLC.

Cc: Consumer Federation of America

Florida Real Estate Forms:

Before I start, please make sure that you get yourself familiar with how you are represented by law in your state. I am a licensed real estate broker in Florida. In Florida, the presumption of representation is transaction broker. Florida does NOT allow dual agents in a residential transaction. Other states use dual agents or designated agents. Please see  

https://m.flsenate.gov/Statutes/475.278 

(1b) Presumption of transaction brokerage:

• It shall be presumed that all licensees are operating as transaction brokers unless a single agent or no brokerage relationship is established, in writing, with a customer. 
• A transaction broker provides a limited form of representation to a buyer, a seller, or both in a real estate transaction but does not represent either in a fiduciary capacity or as a single agent. 

Meaning: 

By providing a limited form of representation to buyers, sellers, landlords, and tenants, the brokerage can get both sides of the deal. Please keep in mind that in Florida the law that required a transaction broker notice to be provided expired on July 1, 2008.  

Now let’s talk forms:

The following forms are provided by our associations. A copy of each form is attached.

• Exclusive Buyer Brokerage Agreement, Transaction Broker (EBBA_7tb)
• Exclusive Buyer Brokerage Agreement, Single Agent (EBBA_7sa)
• Exclusive Buyer Brokerage Agreement, No Brokerage Relationship (EBBA_7nr)
• Exclusive Right of Sale Listing Agreement Transaction Broker_ERS-20tb (Rev. 08_2024)
• Exclusive Right Of Sale Listing Agreement Single Agent_ERS-19sa (Rev. 08_2024)
• Exclusive Right of Sale Listing Agreement No Brokerage_ERS-17nr (Rev. 08_2024)
• Credit Related to Buyer’s Broker Compensation (CR-6 FF)
• Showing Agreement (SA-4)
• Seller’s Agreement with Respect to Buyer’s Broker Compensation (CR-6 GG)

So, now let’s take a guess what form the agents are most likely going to use or are maybe being advised or asked by their brokerage to use. I put my money on the Exclusive Buyer Brokerage Agreement, Transaction Broker (EBBA_7tb).  Because that gives the brokerage the option to get both sides of the deal by providing the buyer and seller limited representation. 

Exclusive Buyer Brokerage Agreement, Transaction Broker (EBBA_7tb)

Above paragraph 1 it says Exclusive Buyer Brokerage Agreement. The part of the Transaction Broker is left out.  

Under paragraph 12. Brokerage Relationship, the following was left out, and I am wondering why!

This limited confidentiality will prevent disclosure that the seller will accept  a price less than the asking or listed price, that the buyer will pay a price greater than the price submitted in a written offer, of the motivation of any party for selling or buying property, that a seller or buyer will agree to financing terms other than those offered, or of any other information requested by a party to remain confidential, and any additional duties that are entered into by this or by a separate written agreement. 

Please see the attached pdf file Exclusive Buyer Brokerage Agreement, Transaction Broker (EBBA_7tb)

Shouldn’t it be paragraph 1 on page 1 instead of paragraph 12. and on page 3. Also, a signature, date, etc. are not required. Why not?  

Exclusive Buyer Brokerage Agreement, Single Agent (EBBA_7sa) 

At least it lists all the duties and actually requires the consumer to sign and date. But again, it should be paragraph 1 and it should list the full name of the form on the top and not just Exclusive Buyer Brokerage Agreement. Please see the attached pdf file EBBA_7sa

Please keep in mind that a buyer does not know what forms the brokerages have at their disposal. Therefore, by law, the representation needs to be a single agent. And again, make it unified and implement it nation-wide like mandating using these forms.

Why isn’t paragraph 12 listed as paragraph 1  on the first page? 

Sellers who are following the news will be set up for a great awakening. They hear in the news that they no longer have to pay for the buyer’s agent, yet when they start interviewing agents, they will most likely be told something totally different. I can see listing agents trying to convince the seller that nothing really changed and that they should offer some kind of compensation to the buyer’s agent to make their home, let’s say, more attractive to the buyer’s agent. I guess this is what you could call scare tactics. But is it when agents can actually show sellers on agent or broker websites that other sellers do offer compensation, especially if the homes listed are within the same neighborhood? Therefore, commissions paid to a buyer’s agent shouldn’t be posted anywhere.

Mike Ketchmark: The real estate industry uses scare tactics to get home sellers to pay the commission fee……………..

Listing Agreements:

Exclusive Brokerage Listing Agreement_EBLA-12 (Rev. 08/2024) – Please see attached. The brokerage relationship is mentioned in only 3 lines on page 3 under paragraph 11 instead on top of page 1. Also, there is no explanation about the duties on each representation listed. Again, I guess it is just expected that sellers know. Agent just checks the transaction broker, and the possibility of earning both sides of the deal is activated by just providing limited representation. 

Exclusive Right of Sale Listing Agreement Transaction Broker_ERS-20tb (Rev. 08/2024)

On top, it only says Exclusive Right of Sale Listing Agreement. No mention of transaction brokers here. 

Under paragraph 11. Line 154 the brokerage relationship is mentioned but limited. 

Again, the following was left out: Why?

This limited confidentiality will prevent disclosure that the seller will accept a price less than the asking or listed price, that the buyer will pay a price greater than the price submitted in a written offer, of the motivation of any party for selling or buying property, that a seller or buyer will agree to financing terms other than those offered, or of any other information requested by a party to remain confidential, and any additional duties that are entered into by this or by a separate written agreement.  

Under paragraph 8a, it says Seller compensate Broker as specified …….. 

Now take a look at paragraph 10 (a), ( b) and (c). They should be listed under paragraph 8 a, b,c & d followed by the current b, c, d, e and f. 

Paragraph 9.
Another way to double the commission. Again, the presumption of a single agent in every state will limit or most likely eliminate this option. The agent would need written consent from the buyer and seller to transition from a single agent to a transaction broker, designated agent, or dual agent. How about mentioning some of the risks if the listing agent also represents the buyer in the same transaction or any agent that works from the same brokerage?! 

Examples: Agents could share information like the price the seller will accept or the buyer is actually willing to pay, the buyer needs to close soon because he is staying in a hotel, etc., or if they decide to get the most money out of the deal for them and their broker.

Now let’s say the buyers have all the money they need and are not interested in getting any assistance from the selling party. Can the listing office now keep the full commission, including the part that was supposed to be for the buyer’s agent, or will the total commission for the listing office be like the total commission minus the commission offered to the buyer’s agent if paragraph 10 (a) line 145 was selected? In the way it is written now, they can keep the full commission. T

Example: Now let’s say the buyer’s agent is from the same brokerage as the listing agent, and the buyer’s agent and buyer agreed to 2.5% compensation, and the buyer told his agent not to bother asking any seller if they would pay the agent’s compensation because the buyer has all the funds needed. In this situation, the brokerage would get:

– both sides from the seller because the listing agent selected paragraph 8 (a) line 109 and entered 6% and under 10 (a) the agent entered 3%. On the top, the brokerage will receive the compensation agreed between the buyer’s agent and the buyer since both agents (buyer & seller) work for the same brokerage. See paragraph 9 [c] – Broker may receive separate compensation from buyer for services rendered to buyer by broker.

Keep in mind that a buyer is not familiar with how listing agreements are being set up and how they are being negotiated between sellers and the listing office. Setups like the Florida Transaction Broker Relationship or similar set ups in other states just keeps working perfectly for the brokerages.

Also, the list price is getting inflated by compensation paid to the buyer’s agency, or does anyone believe that the seller will not include the compensation paid to brokers (listing broker and selling broker) in the list price? Can somebody please explain what actually changed, besides the fact that compensation paid to co-brokers is no longer listed in the MLS? If you like or not, agents are still pretty much in control when it comes to compensation. 

Why not rephrase or change  paragraph 8 to something like:

(a) No compensation will be offered to the buyer’s broker.

(b) Compensation exclusively paid by the seller to the listing office is __2.5%__ or  $_____  

(c) The Compensation exclusively paid to the selling office is __2.5%__or $ _____. 

(d) In the event the listing agent is also the selling agent, the total compensation paid to the listing broker is ______ or $____  with NO additional compensation or fees charged to the buyer. Written consent from the buyer and seller is required to transition to a transaction broker.

To make this work, the presumption of representation has to be a single agent.

As you know, some brokerages charge their agents additional fees, like a broker-only commission. Yet some allow their agents to pass these kinds of fees on to buyers and sellers. 

Also, all forms related to commissions and fees should be changed

from:

Brokerage commissions are not set by law and are fully negotiable. ………

To:

Brokerage commissions and fees (transaction fees, broker only commission, etc.) are not set by law and are fully negotiable. 

Leaving the word fees out could mislead that buyers and sellers think that they are required by some kind of law, especially if they now charge these types of fees via an addendum instead of mentioning it on the buyer broker agreement. Already happening.

Get rid of paragraph 9. (a) & paragraph 10. (a) because it would be already covered under the new 8. (a), (b) & [c], (d). 

This will prevent the listing office from automatically getting both sides of the deal in case a buyer does not work with an agent. See paragraph 9 (a) and paragraph 10 (a). If there is no buyer’s agent, then there will be nothing paid from the listing broker to the buyer’s broker!!! As of now, the listing broker automatically collects both sides of the deal. I don’t see the majority of sellers taking on an additional agreement with the buyer’s broker; therefore, they will probably select option 10 (a), which conveniently benefits the listing broker, especially how everything is worded at this time and broken up under three (3) different paragraphs.

Steering for highest commission paid:

Form: Showing Agreement (SA-4)

Please see attached.

First, I would like to mention there is no disclosure regarding the brokerage relationship on this form. I guess the buyers, no matter where they live or come from, just know that the presumption of representation in Florida is transaction broker.  The law that required a transaction broker notice to be provided expired on July 1, 2008. 

Agents will just use one showing agreement for each property. They will just find out what the compensation is they receive from the listing broker and prepare the form accordingly. Now, before entering each home, the agent will just have the buyer(s) initial each form.

So now let’s say they agreed to 1. 75% and the compensation offered from the listing broker or seller is higher. The buyer’s agent will probably try to convince the buyer to allow him or her to collect the commission offered by the selling party. The buyer’s agent could use a blank listing agreement and point to paragraph 8 (a) and paragraph 10 (a). Now it would be pretty easy to convince the buyer that if the buyer’s agent doesn’t receive the compensation, it will just go to the listing broker, and they (the buyer) are paying it anyway as part of the purchase price. Now let’s say 80% of buyers are not using an agent anymore, and the listing broker checks paragraph 8 (a)  and paragraph 10 (a). They will just double dip on the commission because of the way forms are written. Again, perfect for the transaction broker type of setups.

In my opinion, compensation paid to the buyer’s broker should not be part of the listing agreement at all. No exceptions. There is absolutely no reason why the buyer’s compensation should be part of the listing agreement, unless you just want to provide the brokerages with a way of getting both sides of the deal or even triple.

Just create an addendum stating that this contract is contingent on adding the buyer’s broker commission and fees to the agreed sales with the seller paying the buyer’s broker at closing. Meaning: After you have to come to terms, the buyer’s agent compensation will be added to the sales price. With an addendum like that, there would be really no reason anymore to add anything regarding buyer’s compensation to any of the available listing agreements. Just keep it simple for buyers and sellers. By doing so, you could get rid of paragraphs 8 (a), 9 and 10. Or just add it as a paragraph to the listing agreement. 

What if a buyer doesn’t want to be represented by an agent? Easy enough. The listing broker should use the Exclusive Buyer Brokerage Agreement, No Brokerage Relationship (EBBA_7nr) and just charge a fee for preparing the documents and follow the duties listed under paragraph 12. In my opinion, it is just ridiculous to allow or give a brokerage an easy way to double their commission by transitioning to a transaction broker so they can have both sides of the deal, especially in a case where the buyer doesn’t want to be represented and is just looking for some assistant to prepare the documents. This could be actually part of the listing agreement. Now the listing broker would only be paid the compensation he negotiated with the listing office and a potentially small fee from the buyer for preparing the offer. No more both sides of the deal for just riding up the offer. 

In Florida, the listing agent can’t offer a buyer who has no representation to assist him, her, or them by preparing an offer. A representation form is required. Again, just another opportunity to use the transaction broker form, and we are ready to double dip on the commission. 

I hope I have given you enough reason to: a) consider taking another look at the forms and viewing these forms from a buyer’s and seller’s point of view and not from a brokerage point of view. For me, the forms are written to find ways to make it as easy as possible to provide brokerages with a way to get both sides of the deal. A change from the presumption of transaction broker to single agent is, in my opinion, a must just to save whatever is left when it comes to “our” reputation.

1. b) support the presumption of representation to Single Agent in all states. Until it can be done by law (submitting and passing a new bill), just commit to a nationwide agreement by all associations, like you did, making it mandatory to sign a buyer broker agreement or showing agreement prior to showing homes. 

I hope that the financial institution will be able making the buyer’s broker compensation part of the mortgage. Seller pays listing office and buyer pays buyers office. By doing so several forms could be eliminated or simplified and would make the whole process a lot easier. Forms should not be written to protect the brokerages earnings or to find a way to make it easier to get both sides of the deal. The presumption of representation (transaction broker) and the current forms, is, from my point of view, perfect for the brokerages. How do you see it?

Again, thanks for your time, and I am looking forward to hearing from you.

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