Navigating the October 2024 Changes to NC REALTORS® Residential Forms

As of October 2024, NC REALTORS® (NCAR) has introduced significant changes to several of its standard forms, driven by the recent National Association of REALTORS® (NAR) Change of Practice following the commission lawsuit settlement.

These revisions aim to enhance transparency and ease of use for both REALTORS® and consumers. Below, we outline the key updates you need to know about these form changes and how they will impact your daily practice. NC REALTORS® must transition to these new forms within the next 30 days. Copies of the latest forms can be obtained from the NCAR Forms Library or your forms vendor.

Exclusive Buyer Agency Agreement (Form 201)

This form has been completely re-drafted to improve readability, reduce length, and maintain essential duties and obligations. Key revisions include:

• Clearer Names Section: REALTORS® must enter full legal names for buyers and firms, avoiding informal designations (e.g., "Mr. and Mrs.").

• Property Description: It’s crucial to accurately specify the type and geographic area of the property being sought. Avoid overly general (e.g., “North Carolina”) or overly specific (e.g., “Merry Acres Subdivision”) descriptions unless accurate.

• Compensation Specificity: The form now requires explicit compensation details, in compliance with new MLS rules and License Law. Indicate a specific dollar amount or percentage; vague entries (e.g., “N/A” or “$0”) are prohibited.

• Dual Agency Simplification: The language has been shortened but maintains previous principles. It’s crucial for agents to discuss dual agency comprehensively with clients, even though the form’s primer has been simplified.

• Mediation Clause Removed: Mediation is no longer a requirement in case of disputes, which allows agents to take claims directly to small claims court without the risk of dismissal for failure to mediate.

• Agency Duration: The agreement must specify a definitive expiration date, per License Law requirements. If the buyer remains under contract when the agency expires, extending the agreement is necessary to maintain payment eligibility.

  
  

New Property Showing Agreement (Form 202)

Form 202 addresses a common need for a simple, one-page agreement that allows buyers to tour properties (in-person or virtually) without committing to a full buyer agency agreement.

• Non-Exclusive by Design: Buyers can use this form with multiple agents, making it more flexible for quick showings.

• Limited Scope: The agreement strictly covers property tours, not offer negotiations or transactions. This limitation is explicitly stated in the form to manage expectations.

• No-Fee Option: Agents can choose to charge a fee or waive it, provided the terms are explicitly agreed upon with the buyer.

Technical Edits to Form 220 – Cooperative Compensation Agreement

This form has been modified to align with the new Form 220G – Cooperative Compensation Agreement Flowchart & Information Guide. A key change clarifies that listing firms are not obligated to pay cooperating firms if a seller breaches the contract.

Re-Drafted Form 220G – Cooperative Compensation Agreement Flowchart & Information Guide

Form 220G offers agents a visual guide to navigate cooperative compensation issues:

• Step-by-Step Flowchart: The flowchart guides agents through various scenarios, such as whether the seller has authorized compensation and if it’s a blanket offer or tied to specific terms.

• Important Reminders: On the second page, agents are reminded not to attach Form 220 to purchase contracts or include it in the MLS.

What These Changes Mean for REALTORS®

The re-drafting of these forms reflects a shift towards increased consumer protection and transparency, following the recent legal settlement involving NAR. These updates demand more precise documentation, specific compensation terms, and greater clarity in buyer agency agreements.

Interim Guidelines

The interim guidelines for new Form 201 are highly detailed, offering further insights into completing the form. Make sure to review these guidelines thoroughly, as they provide deeper context and step-by-step instructions for compliance.

Adapting to the Changes

With the implementation of these new forms, agents should update their practices quickly. The grace period for adopting these changes is 30 days, shorter than the usual 60-day window. Start using these forms with new clients immediately to ensure compliance and avoid potential legal issues.

Final Thoughts

These changes, although substantial, aim to empower REALTORS® to provide clearer, more reliable service to clients. The re-drafted forms reflect a balance between consumer understanding and REALTOR® responsibilities, ensuring smoother transactions and clearer expectations. If you have questions or need further guidance, consult the NC REALTORS® Legal Q&As or reach out to the NC REALTORS® hotline for support.

Stay informed, stay compliant, and continue providing exceptional service to your clients amidst these evolving changes.

What do you think about these new forms? Let us know in the comments or share with a colleague in an upcoming CE Class!

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References

NC REALTORS®. (2024, October). Summary of October 2024 changes to NC REALTORS® residential forms. NC REALTORS®.