There are some big changes for Agents and Buyer in Real Estate in Florida beginning in August of 2024. Basically, all “Customers” (prospective Buyers) who are looking at real estate with an agent (Broker) MUST have in place a written agreement with that Broker (their agent) BEFORE viewing property. For Sellers they must decide if they wish to compensate this agent and if so in what way when they execute the new Listing Agreement? So, the checklist goes like this…
- The listing agent will execute with the Seller a Listing Agreement such as the ERS-20tb. This is the Exclusive Right to Sell the property as a Transactional Broker. Again, in this there are 3 options to compensate the Broker for the Buyer. 1) The Seller pays the Listing Broker say 5% and the Listing Broker pays the agent for th Buyer say 2.5%. 2) The Seller pays the Lising Agent say 2.5% and the Seller pays the agent for the Buyer say 2.5%. Or, 3) The Seller will not compensate the agent for the Buyer.
- The agent for the Buyer will execute with the “Consumer” (the prospective Buyer or Tenant) the Transactional Broker version of the Exclusive Buyer Brokerage Agreement (EBBA-7tb) PRIOR to the Broker (the agent) showing any property to the Consumer. This form is pretty straight forward. Basically it says that the Consumer agrees to use the services of the agent EXCLUSIVELY and IF the Seller will not compensate that agent, then the Consumer agrees to. This agreement MAY be cancelled, at the request of the consumer and agreement by the Broker. IF the Broker agrees to do so then the consumer would pay the agreed upon Early Termination fee.
- Use form MEBSSA-1 to modify or to cancel the EBBA agreement.
- Note as well that one could also use the Showing Agreement form (SA-4) which would be specific to showing the Consumer specific properties. This may be useful to say show the Consumer very specific properties while they are in town.
- The Agent will then confirm with the Listing Agent of the properties they are showing you as to IF the Seller is willing to compensate them. You should ask your agent IF there are any properties which you have asked to see which the Seller is not agreeing to compensate them for. Keep this in mind when negotiating a price or terms as for these properties you will be expected to abide by the EBBA form you executed. In short, you will need to pay the agent should you enter into a contract for these properties.
- If you want to contact the LA directly then you would need to ASK if the Agent will agree to cancel the EBBA agreement and at that time you would owe them the specified cancellation fee.
- Assuming that the Seller is compensating the Broker for the Buyer and the Consumer wishes to make an offer on a Property for which the Seller is offering compensation then the Agent will need to have form CABB-1 or CASB-1 executed so as to “memorialize” that the Seller is compensating the Broker for the Buyer in one of the two ways specified on the Listing Agreement.
Sellers, Buyers and Agents must all remember that in Florida the real estate Broker is assumed to be working as a Transactional Broker unless and untill another form of agency is entered into. This could be Single Agency or No Brokerage. In a Single Agency relationship the Customer and the Agent are fiduciaries. As such they can be held accountable for the faults of each other. Thus, most Brokerages do not do allow this so as to avoid the liability. And most customers do not like “the sound of that” either. If you choose to NOT involve a real estate agent as a Buyer then you’re going to make, what for most is the single largest purchase of their lives, without professional guidance. Think about that. For the Seller that chooses not to compensate the Broker for the Seller they should understand that unless their agent and the Buyer enter into a No Brokerage Agreement that this agent is specifically prohibited from representing one party to the detriment of the other. And the Buyer is under no obligation to sign a No Brokerage Relationship Disclosure.
FS defines: “Transaction broker” means a broker who provides limited representation to a buyer, a seller, or both, in a real estate transaction, but does not represent either in a fiduciary capacity or as a single agent. In a transaction broker relationship, a buyer or seller is not responsible for the acts of a licensee. Additionally, the parties to a real estate transaction are giving up their rights to the undivided loyalty of a licensee. This aspect of limited representation allows a licensee to facilitate a real estate transaction by assisting both the buyer and the seller, but a licensee will not work to represent one party to the detriment of the other party when acting as a transaction broker to both parties.
(1) BROKERAGE RELATIONSHIPS.—
(a) Authorized brokerage relationships.—A real estate licensee in this state may enter into a brokerage relationship as either a transaction broker or as a single agent with potential buyers and sellers. A real estate licensee may not operate as a disclosed or nondisclosed dual agent. As used in this section, the term “dual agent” means a broker who represents as a fiduciary both the prospective buyer and the prospective seller in a real estate transaction. This part does not prevent a licensee from changing from one brokerage relationship to the other as long as the buyer or the seller, or both, gives consent as required by subparagraph (3)(c)2. before the change and the appropriate disclosure of duties as provided in this part is made to the buyer or seller. This part does not require a customer to enter into a brokerage relationship with any real estate licensee.
(b) Presumption of transaction brokerage.—It shall be presumed that all licensees are operating as transaction brokers unless a single agent or no brokerage relationship is established, in writing, with a customer.
(2) TRANSACTION BROKER RELATIONSHIP.—A transaction broker provides a limited form of representation to a buyer, a seller, or both in a real estate transaction but does not represent either in a fiduciary capacity or as a single agent. The duties of the real estate licensee in this limited form of representation include the following:
(a) Dealing honestly and fairly;
(b) Accounting for all funds;
(c) Using skill, care, and diligence in the transaction;
(d) Disclosing all known facts that materially affect the value of residential real property and are not readily observable to the buyer;
(e) Presenting all offers and counteroffers in a timely manner, unless a party has previously directed the licensee otherwise in writing;
(f) Limited confidentiality, unless waived in writing by a party. This limited confidentiality will prevent disclosure that the seller will accept a price less than the asking or listed price, that the buyer will pay a price greater than the price submitted in a written offer, of the motivation of any party for selling or buying property, that a seller or buyer will agree to financing terms other than those offered, or of any other information requested by a party to remain confidential; and
(g) Any additional duties that are mutually agreed to with a party.
This aspect of limited representation allows a licensee to facilitate a real estate transaction by assisting both the buyer and the seller, but a licensee will not work to represent one party to the detriment of the other party when acting as a transaction broker to both parties.
