Upcoming Real Estate Forms Changes Part 2: Listing & Purchase Agreements

The way real estate transaction are done in California is changing, and new mandatory forms will be introduced in the summer of 2024. This article will discuss the Residential Listing Agreement and Residential Purchase Agreement.

For sellers, the Residential Listing Agreement has been completely revised. The form is a bit longer now, primarily because it is organized in a grid format. This grid lays out all the terms in detail, making it clearer.

The Main Changes The Residential Listing Agreement Are:

• More detailed info on what the seller will pay and to whom.
• There is now an Optional Concessions Section where sellers can confirm if they are willing to pay Optional Concessions. Optional Concessions can cover costs like escrow and title fees, lender fees, repairs, and broker compensation.
• This information will be shared on the Multiple Listing Service (MLS).
• Sellers need to make sure buyers and agents have a signed Buyer Representation and Broker Compensation Agreement before showing the property ( refer to this article for information on these forms).
• New guidelines on how to handle buyers who do not have their own agent.

The Residential Purchase Agreement also has some updates for buyers, though there are not as many. The main changes are:

• Homeowner insurance is now a separate item to consider.
• If the property has three or more units, the seller has to give the buyer an additional document about wooden balconies and stairs.
• It clarifies who will pay the brokers compensation.

Remember, it is always important to understand any legal document before signing it. If you have questions, you can contact the Destination Real Estate team. Watch for information about upcoming free webinars to explain these changes in detail.