Monthly Newsletter

October l 2024

Agent Recognition

NAR required training due by 12/31/24

NAR requires ethics training to be completed by the end of this year.

NAR offers an online course at no charge. Here's more information:

https://www.nar.realtor/about-nar/governing-documents/code-of-ethics/code-of-ethics-training/code-of-ethics-training-for-existing-members

To check if you have met the requirement, click here to log into the NAR account.

Upgraded Paperless Pipeline

New fields when entering a transaction

Buyer's Agent Compensation Clarifications

Buyer Agent's Compensation can come from 3 sources.*

The total compensation could be from one source or a combination of sources:

1- Buyer pays the Buyer's Agent Compensation based on the Buyer's Agency Agreement

2-Seller's Agent pays the Buyer's Agent Compensation, also known as Co-Op compensation

3-Seller pays the Buyer's Agent Compensation based on the AOS (not to be confused with Co-Op)

*Distributed at closing to the Brokerage, then paid to the Buyer's Agent by the brokerage

Letter from our Broker, Dave Springer:

Hi All,

We are a month plus into the changes with how compensation is handled. I believe there is still a lot of confusion as to how it all should be handled on paperwork. We have talked about it in various emails and meetings. If you have not, please go back and educate yourself through the different ways we have distributed information. This is very important and if not handled correctly, it could turn into an issue for you and your clients. I am going to lay out a few important pieces below again.

For example purposes:  You have a buyer agency agreement set at 3% and the coop being offered is 2%.

You can not set a normal guideline for yourself that you will accept the coop and waive the difference of 1% as a normal way of conducting business.

Compensation must be “objectively ascertainable and not open-ended.” You may renegotiate with your buyer from time to time as you need, but this can not be your normal process. 

The buyer can try to get the seller to cover the extra 1%, which you would do in the agreement of sale paragraph 3A under seller concessions/buyer broker fee. In this case, you would have a cooperating broker compensation addendum at 2% and in paragraph 3A of the AOS enter 1% to equal the 3% total. If the seller will not agree to this, the buyer would be responsible for paying the 1% directly on the ALTA at closing per your buyer agency contract.

For example purposes:  You have a buyer agency agreement set at 3% and the coop being offered is 3%.

You should have a cooperating broker compensation form signed at 3%. There should not be anything put in the AOS paragraph 3A. I have seen many where the coop is signed and in this example 3% is put in paragraph 3A. If this happens, a seller is agreeing to pay 3% plus another 3%. This could backfire on you and your seller and cause a major problem. It should not be in both spots.

For example purposes:  You have a buyer agency agreement set at 3% and there is no coop being offered.

The buyer can try to get the seller to cover the 3%, which you would do in the agreement of sale paragraph 3A under seller concessions/buyer broker fee. In this case, you would not use a cooperating broker compensation since they have not agreed up front to pay a coop. If the seller will not agree to this, the buyer would be responsible for paying the 3% directly on the ALTA at closing per your buyer agency contract. There also could be a negotiation where the seller agrees to pay for instance 2%, which would then go in 3A and then the buyer would pay 1% at closing.

For example purposes:  You have a buyer agency agreement set at 2.5% and the coop being offered is 3%.

You are only able to collect what is in your buyer agency agreement, so in this case 2.5%. The extra .5% would need to either be rebated back to the buyer on the ALTA (make sure that is ok with the lender) or it would go to the seller (not the option that helps your buyer). You can not just update your buyer agency agreement to allow yourself to collect the difference. I understand this can be frustrating and feel like you are leaving $$ on the table, but try not to look at it that way. Set a fee with your clients that you are comfortable with.

If any of this is confusing, please let me know.

Business Building

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Springer A.C.T.I.O.N Team

Action is an acronym for:

Aiding | Communities | Together | in | Outreach | Needs

Our Purpose:

"To give back to the communities we serve. We aim to contribute in a way

that assists men/women/children with housing, food, and clothing needs."

Please donate new full-sized toiletries if possible.

Please drop items in the collection bin at each office.

No glass or expired items.

Deodorants

Shampoo/Conditioner

Soap Bars/Body Wash

Toothbrushes/Toothpaste

Thank you for helping us make a difference in our communities!

The charity to benefit from the donations is Project Outreach.

Questions? Email Monique@SpringerRealtyGroup.com