In response to the National Association of Realtors (NAR) settlement agreement effective August 17, Florida Realtors has introduced two new forms and revised an existing one. These changes are designed to enhance transparency and ensure compliance with legal standards. This article focuses on the revised Showing Agreement (SA-4), highlighting the significant updates and comparing them to the original terminology and provisions.
Terminology Adjustments
The most notable change in the revised Showing Agreement is replacing the term “Buyer” with “Consumer.” This shift from “Buyer” to “Consumer” reflects a broader approach. This change aligns with contemporary real estate practices, which recognize a more comprehensive range of consumer interactions beyond traditional buying.
Comparison
• Original: “Buyer”
• Revised: “Consumer”
Broker’s Obligations
The responsibilities of brokers have been expanded and clarified in the new agreement, including:
Broker Assistance: Originally, brokers were required to assist buyers in negotiating transactions. The revised form now specifies that brokers must help consumers monitor deadlines and negotiate and close transactions. This ensures a more comprehensive support system for the Consumer throughout the transaction process.
Comparison
Original: Assistance in negotiating transactions.
Revised: Assistance in monitoring deadlines, negotiating, and closing transactions.
Disclosure of Competing Offers
The revised agreement mandates that brokers notify Consumers of competing offers without disclosing material terms or conditions, which was less explicitly stated in the original form. This change aims to maintain transparency while protecting confidentiality.
Comparison
Original: Less explicit on notification of competing offers.
Revised: Brokers must notify Consumers of competing offers without disclosing material terms.
Consumer’s Obligations
The revised agreement also provides a more detailed outline of the Consumer’s responsibilities:
Cooperation with Broker: Consumers must contact the broker immediately upon negotiating for property acquisition, ensuring prompt and exclusive engagement with the contracted broker. This requirement was less emphasized in the original form.
Comparison
Original: General cooperation with the broker.
Revised: Immediate contact and exclusive work with the broker.
Financial Information and Credit Checks
The revised agreement requires Consumers to provide accurate personal and financial information and authorizes brokers to run credit checks. This addition enhances the broker’s ability to facilitate the transaction efficiently.
Comparison
Original: Less emphasis on financial information and credit checks.
Revised: Requirement for accurate financial information and authorization for credit checks.
Compensation Structure
The new agreement provides a more detailed structure for broker compensation:
Purchase, Exchange, or Lease Transactions: Compensation can now be a percentage of the purchase price, a fixed amount, or a combination of both. The original form did not clearly define this detailed structure.
Comparison
Original: General terms for compensation.
Revised: Specific percentages, fixed amounts, and combinations for various transaction types.
Non-Refundable Retainer Fee
The revised agreement introduces a non-refundable retainer fee for broker services, ensuring that brokers are compensated for their efforts regardless of the transaction outcome.
Comparison:
Original: No mention of a retainer fee.
Revised: Introduction of a non-refundable retainer fee.
Dispute Resolution
The revised agreement includes a structured resolution process:
Mediation and Arbitration: The revised form mandates mediation as the first step for resolving disputes, followed by binding arbitration if mediation fails—this structured approach to dispute resolution needed to be more detailed in the original form.
Comparison
Original: General dispute resolution.
Revised: Specific steps for mediation and binding arbitration.
Acknowledgment and Modifications
The revised agreement includes explicit provisions for acknowledgment and modifications:
Written Changes: Changes to the agreement can only be made in writing and signed by both parties. The agreement explicitly states that electronic signatures are acceptable.
Comparison
Original: General terms for modifications.
Revised: Specific requirement for written changes and acceptance of electronic signatures.
Negotiable Commissions
The form specifies that brokerage commissions are negotiable and not set by law, reinforcing the importance of mutual agreement in real estate transactions.
Comparison
Original: No emphasis on negotiable commissions.
Revised: Explicit statement that commissions are negotiable.
Conclusion
The revised Showing Agreement introduced by Florida Realtors represents a significant step towards greater transparency and legal compliance in real estate transactions. The new agreement aims to facilitate smoother transactions and foster trust by clearly defining the obligations of brokers and Consumers. The introduction of structured compensation and dispute resolution mechanisms underscores a commitment to fair and transparent practices in the Florida real estate market.