The Florida Realtors organization has introduced two new compensation agreements, along with their modification forms. These documents are crucial following changes to the Multiple Listing Service (MLS), which ensure that Buyer Brokerages receive compensation from either the Seller or the Seller’s Brokerage when a cooperating commission is available on listings.
Previously, MLS rules safeguarded Buyer Brokerages by guaranteeing payment from Seller Brokerages based on the commission percentage listed on the platform. However, with the recent modifications, an additional agreement is necessary. This agreement can be made either between the Seller’s Brokerage and the Buyer’s Brokerage or directly from the Seller to the Buyer’s Brokerage to facilitate payment.
The Compensation Agreement can be executed prior to the Purchase and Sale offer between the Buyer and Seller. By default, it lasts for 30 days but is automatically extended until the closing date of a Purchase Agreement, provided one is entered during the term of the Compensation Agreement.
There are various ways agents can utilize these forms. For example, a Listing Agent might send an introductory email containing the proposed compensation agreement to a Buyer’s Agent when a property showing is requested. Conversely, the Buyer’s Agent can submit the proposed compensation agreement to the Listing Agent when preparing to make an offer. Additionally, the Seller can offer compensation directly to the Buyer’s Agent using the Seller to Buyer’s Broker form.
These compensation forms are closely tied to the new listing agreement. Specifically, Section 10(a) addresses the compensation amount that should be included in the Seller’s Broker to Buyer’s Broker Compensation Agreement. Meanwhile, Section 10(b) pertains to compensation offered directly by the Seller in the Buyer’s Broker Compensation Agreement.
Navigating the new paperwork requirements can be challenging. If you have any questions, don't hesitate to reach out to your trusted real estate attorney for guidance.
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