Question: Are California real estate brokers and agents only allowed to use real estate forms published by trade unions?
Answer: Many brokers erroneously believe they must use forms published by their trade union. However, the Department of Real Estate (DRE) clearly states that listing agents, to fulfill their fiduciary duty to the sellers they represent, must present all offers received regardless of the form on which the offer is written. [See “Being an agent means never having to say you’re sorry,” DRE Real Estate Bulletin, Fall 2001, Page 12]
It is a reportable offense to fail to submit all offers.
No one approves forms; not the State Bar, the DRE, or trade unions such as C.A.R. Each publisher is responsible for its own forms. All published disclosure forms are either:
- mandated for use by dictate of the state legislature or the DRE, such as the Agency Law Disclosure – Disclosure Regarding Real Estate Agency Relationships [ft Form 305], Condition of Property Disclosure – Transfer Disclosure Statement (TDS) (first tuesday Form 304) and the Natural Hazard Disclosure Statement (first tuesday Form 314); or
- generic forms, such as net sheets, costs sheets, etc. Each form mandated for use by the state must have the same content – no matter who publishes it.
A broker may use any form he chooses. Other brokers, trade union associations, insurers and the MLS may not and do not require a broker to use a particular form. A sales agent who is employed by a broker who chooses to require his agents to use C.A.R. forms must do so. The rest of the sales agent’s listing or acceptance package can be comprised of forms published by others, such as first tuesday.
Compare as equal or better the real estate forms available through first tuesday. Find information at the first tuesday Forms-on-CD website.
Dear Jerry,
Thank you for your inquiry as it enables us to produce better materials for our students.
Failure to submit all offers, regardless of the form the offer is written on, is an offense reportable to the Department of Real Estate (DRE). It is also a breach of fiduciary duty to a client.
DRE commentary on this point of practice is contained on page 12 of their Fall 2001 Real Estate Bulletin.
In regards to your MLS question, the percentage split between the seller’s broker and buyer’s broker is governed by the terms of the listing agreement. As you mention the seller’s broker does not accept first tuesday forms, we presume he is using the Residential Listing Agreement published by CAR. The buyer’s broker’s collectable fee is referenced in 4(D) and stated on the MLS profile of the property. However, this amount is not necessarily a 50/50 split, but an amount agreed to by the seller and the seller’s broker.
Are you a member of the MLS or a reciprocal MLS? If not, if the seller’s agent is using CAR forms to structure the transaction, they may set your percentage fee at any amount, 50/50 or otherwise.
Regards,
The first tuesday Editorial Staff
Representing a Buyer of residential property I submitted an offer on 1St Tuesday form. The listing agent, told me in writing that I had to submit my client’s offer on a CAR form. 1st Tues responded by sending me a fax that said the listing agent had to present my offer.
A counter offer was sent from the Seller on a CAR form and again the listing agent told me in writiing my counter offer had to be on a CAR form.
In addition, the listing Broker said that because I wasn’t a member of their local MLS or an associtate MLS that they would not split their listing commission on a 50 50 basis. In effect forcing me to join MLS in order to get a 50 50 split.
Please give me the DRE’s section in the law that addresses these issues of “form use” and forced MLS membership to share published commission splits with listing and selling agents.
I do mostly commercial and farm brokerage.