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Dear Forms Committee: In OREF 050 – Buyer Representation Agreement, what exactly do lines 46 & 47 mean?

Lines 46 & 47 mean that before the agent receives compensation from more than one person in a transaction, the NAR Code of Ethics requires that the client must be informed of that fact and consent to it. For example, if the buyer’s agent is entitled to receive $3,000 under a Buyer Representation Agreement, but the BAC would only pay the buyer’s agent $2,500, then after the BAC credit, the buyer still owes the buyer’s agent $500, so the buyer’s agent is entitled to compensation from two different sources.

The reason this is in the Buyer Representation Agreement is that Article 7 of the Code of Ethics requires it:

Article 7

In a transaction, REALTORS® shall not accept compensation from more than one party, even if permitted by law, without disclosure to all parties and the informed consent of the REALTOR®’s client or clients.

If the agent would like to waive the additional fee after the BAC credit, the buyer and agent can agree to that change in writing, either via an addendum to the Buyer Representation Agreement or execution of a new Buyer Representation Agreement.  If the additional fee is waived by the agent, there is nothing to disclose and no requirement for consent.

All comments and responses from OREF or its staff, managers, and volunteers are non-legal opinions made for general purposes. Each Forms subscriber must rely solely upon their Principal broker or personal legal counsel for specific advice and instruction. You and your client should independently confirm that the Form(s) you use are legally suitable for the purposes intended and that they are current with respect to all laws and regulations.