Heads Up! New Changes to GAR Form 101: What You Need to Know

The Exclusive Seller Brokerage Engagement Agreement (Listing Agreement)…

As some of you may know, there were changes made to this form in response to the recent developments in our profession with one very important new addition.

Pertaining to the Commission section (Paragraph A, Section 4; top of page 2), you’ll see that things are a little different. At the top (subsection a), it references the overall commission. Now, below that (subsection b), it has added a new part where a box must be checked as to whether or not the Seller directs the Broker/Firm/Agent to pay a portion of the commission to a potential cooperating firm. This is new, and you’ll definitely need to mark one of the boxes.

Most likely, you will be marking the box that the Seller DOES direct you to pay a portion of the commission. But remember — any compensation arrangement mutually agreed upon is ultimately a negotiation between you, as representative of the firm, and with the seller as the client/principal.

Once you negotiate the overall commission, then you’ll want to explain to your client that you are offering a portion of the commission to a potential cooperating agent as most buyers will be represented by another agent. But again, this is ultimately a negotiation.

You’ll also notice that the forms added an additional pre-printed section thoroughly explaining that nothing in the listing agreement shall “obligate” the seller to pay any portion for a co-op so when you’re explaining this section to a seller you’ll want to make clear that this is what you charge overall & then you’re willing to pay a part of that to another agent.

If you’d like to learn more about the new 2024 GAR Forms, my next class on that topic is Thursday February 22nd. It’s a complimentary class as it’s sponsored by The American Mortgage Partners. You can sign up by visiting: www.americanreu.net/class/3521

Until next time.

Marshall McCart