Written Buyer Agreements and New MLS Policy

QUESTION: Last week you mentioned that a listing firm does not need a written buyer agreement with an unrepresented buyer at an open house. Do we need an extra form to document the buyer’s status as unrepresented? When do we need to have a written buyer agreement under the new MLS policy? What form(s) should my firm use?

ANSWER: Starting in July or August, depending on your MLS’s rollout of the new rules, MLS participants wishing to show properties to a prospective buyer must have a written agreement in place prior to touring the property. These changes will go into effect no later than August 17, 2024. New Section 5.0.2 of the MLS policies states:

Unless inconsistent with state or federal law or regulation, all MLS Participants working with a buyer must enter into a written agreement with the buyer prior to touring a home.

Unpacking the New MLS Policy.

1.     The written agreement with the buyer required by the new MLS policy (“Buyer Agreement”) must contain several provisions under the settlement. These provisions include a disclosure of the compensation the participant will receive, if any, and a conspicuous statement that broker fees are not set by law and are fully negotiable. Both the Exclusive Buyer Agency Agreement (Form 201) and the Non-Exclusive Buyer Agency Agreement (Form 203) will satisfy the License Law and new Section 5.0.2.

2.     What does it mean to be “working with a buyer” under the new MLS policy? NAR has published guidance which is available here in a series of FAQs. FAQ number 51 states that the “‘working with’ language is intended to distinguish MLS Participants who provide brokerage services to a buyer—such as identifying potential properties, arranging for the buyer to tour a property, performing or facilitating negotiations on behalf of the buyer, presenting offers by the buyer, or other services for the buyer—from MLS Participants who simply market their services or just talk to a buyer—like at an open house or by providing an unrepresented buyer access to a house they have listed.”

If a broker is only working as a listing agent or subagent of the seller, the broker is not “working with” the buyer, so long as they are not acting as a dual agent. In these circumstances, the WWREA should make clear that the participant is not “working with” the buyer. You do not need any additional documentation to indicate that the buyer is unrepresented and acting on their own behalf.

3.     What does “touring a home” mean under the new MLS policy? FAQ number 52 makes clear that “touring” means actual entry into the property by the buyer and/or MLS participant. The Buyer Agreement must therefore be in place prior to entry into the property.

4.     How does NC License Law work with the new MLS Policy? The License Law requires that a written agreement with the buyer be executed no later than when an offer is presented. FAQ number 54 states that all “MLS Participants working with a buyer must have a written agreement prior to touring, unless state law requires an agreement earlier in time.” Therefore, being in compliance with the new MLS policy will also satisfy compliance with the License Law.

Solutions for Buyer Agreement compliance should be in place beginning August 17th at the latest. There are many ways that firms and MLS participants can comply with the new MLS policy and the License Law. However, both Form 201 and Form 203, as revised, are now available for use.

Release Date: 6/27/2024