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As you know, starting no later than 8/17, all REALTORS® will have to have a signed buyer agency agreement before showing homes to prospective buyers. The article below is from a recent Q&A submission to the attorneys at NC REALTORS®.
QUESTION: I understand that agents working with a buyer need to have a written buyer agreement in place before touring a home either in-person or virtually. But my question is, what am I supposed to do if a buyer I’m working with will not sign one? I used to use oral buyer agency to figure out whether the buyer and I would be a good fit. How should I do that now?
ANSWER: There are several options you might consider that could help you facilitate a relationship with the buyer before an exclusive agency agreement covering a broad territory is executed.
Use oral buyer agency under the License Law to provide other services.
Oral buyer agency under Rule .0104(a) is still the law in North Carolina. However, under the new MLS rules, it is limited to only those services that can be provided by a buyer agent outside of touring a home either in-person or virtually. Services that buyer agents can provide under oral buyer agency include sending the buyer prospective homes via email, sharing information about the agent’s firm, meeting with the buyer in the agent’s office to discuss properties and potential agency, and other brokerage services. As always, make sure you comply with the License Law fully and provide the WWREA, but until an agent tours a home with a buyer they are working with, oral buyer agency is still permissible.
Use Form 203 (Non-Exclusive Buyer Agency Agreement) to affirm oral buyer agency in order to tour a home.
Form 203 is designed to be a more flexible option for buyers and agents who are not yet ready for exclusive agency. This form complies with both the License Law and the new MLS rules. Form 203 does not obligate the buyer to pay the buyer agent a fee, but it does spell out exactly what the buyer agent intends to be paid in a potential transaction from either the seller or the listing firm. Since this agency agreement is non-exclusive, it operates exactly the same as oral buyer agency, because the client can sign an exclusive agency agreement with anyone at any time, including the agent with whom the buyer has signed Form 203. The difference is that with Form 203 an agent working with a buyer can tour a home, and an agent under oral buyer agency cannot.
If the buyer is willing, execute an Exclusive Buyer Agency Agreement (Form 201) that is limited in scope.
Agents wishing to only work with clients open to exclusive agency might consider limiting the scope of their agency in Form 201. Paragraph 1 of that form allows an agent to keep their agency limited to one or several properties. The territory for property stated in that paragraph does not have to be broad, although that is still permissible. If a buyer client is serious about a particular property, this might be a good way to ensure the agent is compensated for their services prior to showing, while not committing the buyer to exclusive agency in a broader territory.
Ultimately, if you are working with a buyer that will not sign a written buyer agreement that satisfies the License Law and MLS rules, then a tour will not be possible. That buyer will need to find a way to tour the home themselves while being unrepresented.
Solutions for written buyer agreement compliance should be in place as soon as possible since some MLSs are already making their rules changes. Firms are, of course, welcome to use their own buyer agreements, but the standard forms are an easy way to make sure you are operating in compliance. If you seek assistance from your own attorney to draft a custom buyer agreement, be sure to ask that it comply with not only the License Law, but also the new MLS rules as summarized by NAR here.
How do you plan to be in compliance with the new NAR requirements rolling out on 8/17 (or sooner)? Let us know in the comments below or share with a colleague in an upcoming CE Class!
Release Date: 7/25/2024
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