September 23rd, 2024 at 2:52 pm
A. Compensation to be determined before Buyer writes an offer.
B. Compensation to be whatever amount the seller offers to pay.
C. Compensation to be whatever amount Buyer offers to pay.
D. Compensation to be zero.
Answer: Answer A is wrong. As background, the NAR Settlement Agreement requires all MLS participants working with a buyer to enter into a written agreement before the buyer tours a home. Additionally, the NAR Settlement requires the buyer-broker agreement to specify the amount or rate of compensation. Saying as in Answer A, that the compensation will be determined later, is not specifying the amount or rate of compensation.
Answers B and C are wrong. Under the NAR Settlement, the compensation in the buyer-broker agreement must not only be specific, but it must also be objectively ascertainable, and it cannot be open-ended. The NAR Settlement actually uses the wording in Answer B as an example of what is disallowed. Similarly, the wording in Answer C would also be disallowed, given that it is also non-specific, not objectively ascertainable, and open-ended.
Answer D is the correct answer. As far as the NAR Settlement is concerned, you can, as a buyer’s agent, write “zero” as your compensation. “Zero” is specific, objectively ascertainable, and not open-ended. However, writing “zero” would be a terrible idea for you! Under the NAR Settlement, you cannot receive compensation for your services from any source that exceeds what’s set forth in your buyer-broker agreement (see paragraph 2E(2) of the BRBC). So if you write in “zero” as your compensation in your buyer-broker agreement, the maximum compensation you can receive from anyone, including the seller, is also zero.
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