First, if you’re an agent reading this then call me, Chris Ryder, at 561.818.3858. You need a new Broker.
Realtors, like other profesionals who do work for others, want to be paid. Before showing a prospect ANY property we get a Buyer’s Broker agreement signed by our customer. When making appointments for showings we ask the Listing Agent if the Seller is willing to compesate us. The answer is usually yes and 2.5% say. Great! We show the property to our customer and they want to make an offer. Super! But we want to get that offer of compensation formalized BEFORE sending over any offer. There are 2 forms for this. So, should the agent for the Buyer sent to the listing agent for execution the CABB-1 (Compensation Agreement – Seller’s Broker to Buyer’s Broker) or the CASB-1 (Compensation Agreement – Seller to Buyer’s Broker)?
The answer is: It depends on which box is checked off on the Listing Agreement. If box 10(a) is checked on the sale listing agreement (Or, 8(a) for rental listing agreements) then you should send form CABB-1. This is the scenario similar to the way it always was. The Seller is paying the listing agent say 5% and the listing agent is offering say 2.5% to cooperating agents. Or, if box 10(b) is checked on the sale listing agreement (Or, 8(b) on the rental listing agreement) then you would send to the listing agent form CASB-1 for THE OWNER to sign. In this scenario the listing agreement states that the Seller will be compensating the Broker for the Buyer in the amount of say 2.5%.
Now, IF the listing agent does not immediatly return the executed form back to you then use the form CR-7 as an addendum to the Contract (or CTL) being presented. This gives the BUYER the option to withdraw, or at least renegotiate, so that they can avoid paying your fee. It reads:
This Contract is contingent upon (check one) __ Seller’s Broker and Buyer’s Broker or __ Seller and Buyer’s Broker executing a compensation agreement with terms acceptable to Buyer (“Compensation Agreement”) within ____ days (if left blank, then three (3) days) after the Effective Date (“Time Period”). If the Compensation Agreement described herein is not executed and delivered within the Time Period, then Buyer may, within three (3) days thereafter deliver written notice to Seller, terminating this Contract in which event the Deposit shall be refunded to Buyer, thereby releasing Buyer and Seller from all further obligations under this Contract. If Buyer fails to timely deliver said written notice to Seller, this contingency shall have no further force or effect.
The Buyer may also wish to pay their agent BUT for the Seller to give thme a credit in this amount. To do this one would use the rider: “FF. CREDIT RELATED TO BUYER’S BROKER COMPENSATION.”
