Upcoming Real Estate Forms Changes Part 1: Compensation

The way real estate transaction are done in California is changing, and new mandatory forms will be introduced in the summer of 2024.

Two new forms you might see are the Broker Compensation Advisory and the Buyer Representation and Broker Compensation Agreement. Here’s a quick overview of what these forms cover.

Remember, it’s important to read and understand any legal document before signing.

Buyer Compensation Advisory: - Compensation amounts are negotiable. - The seller agrees to pay their broker. - The seller may allow their broker to share compensation with the buyer's broker. - Or, the seller may decide not to offer any compensation to the buyer's broker. - Negotiating how much each broker gets paid and who pays them is part of the process.

Buyer Representation and Broker Compensation Agreement: - This form must be completed before any agent or broker shows you any properties. - The maximum representation period is 3 months. - The types of properties and locations to be shown will be listed. - If the seller agrees to pay the buyer’s broker, it reduces the buyer’s obligation. - If the buyer can’t pay, the purchase depends on the seller agreeing to pay the buyer’s broker. - The buyer must provide proof of funds for the purchase deposit, closing costs, and broker’s compensation within 5 days of signing the agreement.

Later this year, Destination Real Estate will host a free webinars to answer any questions about these new forms and practices. In the meantime, feel free to contact any of our team members with your questions.