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BROKER CORNER

2021 Contract Changes Part 2

12/16/2020

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As noted in last week’s Broker Corner2021-gar-contract-changes-part-1.html, the 2021 GAR contract changes are final.  Last week the changes to the Listing Agreement were summarized. This week we will cover the changes to the Buyer Brokerage Agreement and the Purchase and sale Agreement. For additional detail, please see the RMAA Hub Resources Library for a Power Point of Missy Robinson’ s class on the changes.  The new forms can also be found in the Resources Library.  There will be additional classes on the changes to the forms.  We highly recommend that you register and attend!
 
Important changes to the Buyer Brokerage Agreement:
 
  1. The name has been changed to “Exclusive Buyer Brokerage Engagement Agreement.”
  2. Independent Contractor has been moved to a definition at C97)(i).  No need to select it anymore.
  3. Dual agency is not offered by RMAA.  That has not changed.  If it were offered, there is now a requirement that the Buyer consent to dual agency.  
  4. Section B has been expanded to include an acknowledgment by the Buyer that Buyer is not a party to another Buyer Brokerage Engagement and, if the Buyer is a party to a previous agreement or terminated a previous agreement without consent from the previous broker, the Buyer may have to pay the previous broker a real estate commission.  Further, a commission may be due to a previous broker should there be a purchase or lease on a Protected Property during a Protected period.
  5. Unilateral Extension of the Buyer Brokerage Term for a period the property was under contract: The Broker must now give notice to the buyer within 5 days of a deal falling through, but, in any event, the notice MUST be given before the Buyer Brokerage expires. 
  6. Added under miscellaneous:  Broker has no liability for third party vendors that may have been referred to the buyer.
  7. Notice to Extend Listing Period has been renamed to cover all brokerage agreements (Buyer, Seller or Lease).  The new name is “Notice to Extend Brokerage Engagement Agreement.”
Note that there are other miscellaneous changes in the Exclusive Buyer Brokerage Engagement Agreement, including renumbering and content location changes.  Please review the new Agreement before using it.
 
 
Important Changes to the Purchase and Sale Agreement:
  1. An option was added for Earnest Money to be via ACH.  However, please check with attorneys if the earnest money will be held by them.  Many attorneys will not accept an ACH payment.
  2. Broker Relationships have been changed to “Buyer’s Broker” and “Seller’s Broker.”  The old terminology of Selling Broker and Listing Broker are eliminated.
  3. Section B(3)(c).  Sentence added at the end of the paragraph:  Buyer agrees to indemnify Seller against any and all claims of the county for unpaid ad valorem real property taxes for the year in which the property is sold.
  4. Language in the Right to Inspect paragraph has been expanded to clarify that the Buyer can inspect with prior notice and at reasonable times.  (This would include tomes after the due diligence period has ended.)
  5. Language added to recognize that brokers are express third party beneficiaries to the Agreement. B(10)(b).
  6. Language is added that the Buyer is to examine the propensity of the property to flood and flood zone certifications. B(10)(c).
  7. Language is changed from damaged to destroyed at (C)(3) : Risk of damage to property
  8. Added disclaimer language regarding GAR Forms: “No representation is made that the GAR Forms will protect the interests of any particular party or will be fit for any specific purpose.” C(4)(g)
  9. Written representations of the Seller regarding the property or neighborhood will survive the closing.  (Be sure your Seller knows to complete the Seller Property Disclosure correctly!)
  10. Language added above the signature lines: “By signing this Agreement, Buyer and Seller acknowledge that they have read and understood this Agreement and agree to its terms.”
 
Note that there are other miscellaneous changes in the Purchase and Sale Agreement, including renumbering and content location changes.  Please review the new Purchase and Sale Agreement before using it.
 
There are miscellaneous changes and updates to the New Construction PSA and the New Construction Exhibit.
 
There are several new forms that are welcome additions to the GAR Forms.  Please review them.
  1. NEW! F289 Request for Confirmation of Presentation of Offer/Counteroffer. This is only signed by brokers.  You can use this form if you feel a broker did not present your offer.
  2. NEW! F290 Agreement to Reinstate Contract. This form can be used if a contract was unintentionally terminated and the parties want to continue.  The form does not change deadlines, but if changes need to be made to the original agreement, they can be added in Paragraph 2.
 
Next week we will summarize changes to Disclosures, Exhibits and Authorization.
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2021 GAR Contract Changes Part 1

12/9/2020

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The January 2021 GAR contract changes are final. A Power Point of the changes, written by Missy Robinson of Chicago Title, is posted in the RMAA Hub in the Resources Library.  There are new forms as well which can also be found in the Resources Library.  Important changes to the agreements will be covered here over the remaining weeks of December.  Please be sure to review the changes and new forms before using them for details.


Important changes to the (former) Listing Agreement:
  1. The Exclusive Seller Listing Agreement” will now be known as the “Exclusive Seller Brokerage Engagement Agreement.”  
  2. There are 3 dates to complete: The Start Date, the Marketing Commencement Date, and the Ending Date.  
  3. There is a new “Commission Adjustment to Cooperating Broker clause to comply with the legal obligation for the Seller to approve of how money is used for commission.
  4. Sellers have to consent to dual agency.
  5. When a sale has fallen through and an extension of the listing period is allowed, a time limit of 5 days has been placed on notification by the listing agent to the seller.  The Notice must be in writing in writing and (very important) the Notice to extend must be prior to the expiration of the brokerage agreement.
  6. Added clause: Buyers and Brokers may take photographs, videos and other electronic images so the seller should remove personal property that the Seller does not want in an image.
  7. Broker must list in MLS/FMLS within 1 day of the Marketing Commencement Date (including Coming Soon).
  8. Section C. Language was added referencing the Georgia Law requiring latent defects to be disclosed as well as the Federal law reference that the Lead Based Paint Disclosure is required if the property was built prior to 1978.  (This removes the burden of counseling a Seller to comply.  You have the legal code references.)
  9. For your protection, clauses were added that Broker has no duty to inspect or advise regarding the propensity of the property to flood or flood zone certifications.
  10. For your protection, the clause regarding brokers’ lack of authority was expanded to giving Notices on behalf of the seller other than to forward, if requested by seller, a notice signed by seller.  As usual, a notice received by a broker is deemed to be noticed received by the seller.
  11. A new Seller duty was added to carefully read all contract to sell before signing the, and comply with all duties and all time deadlines.
  12. The Seller Default section was expanded to make clear that if a seller terminates a brokerage agreement without the agreement of the broker, then the broker removing the listing from MLS, Removing signage and ceasing marketing shall not be evidence of the broker’s agreement to mutually terminate, but is merely acquiescence of the unilateral termination.
There are additional details, relocated clauses and other new paragraphs in the miscellaneous section of the new Exclusive Seller Brokerage Engagement Agreement.  Please review the entire document.


Next week we will summarize changes to the Buyer Brokerage Agreement and the Purchase and Sale Agreement.
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Guidelines for Letters and Photos to Sellers. Don’t Inadvertently Violate Fair Housing Laws!

12/2/2020

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Low inventory and high demand have driven highly competitive multiple offer situations.  To distinguish themselves, buyers often send sentimental letters and photographs to sellers to promote and distinguish their offer as the one to accept.  It is important to keep Fair Housing laws in mind, however, whenever your client either sends or receives a letter.
Do not allow a photo to be included.
Including a photo of a buyer with a letter to a seller almost inherently violates fair housing laws. A photo can pull the Seller’s heartstrings, but it can also show race, color, family status or other features of being in a protected class.  This does not just impact the sellers who viewed the photo or the buyers who submitted it, but the real estate licensees who are involved in the transaction. All are culpable under state and federal laws.  If you receive a letter to a seller with a photo, inform the sender that the photo cannot be included.  If the buyer won’t remove it, you should. 
A letter itself may not violate fair housing laws – unless it does.
​

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