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Invoice terms and conditions sample text for Real Estate

well here it is the new buyer representation and broker compensation agreement brbc revised July of 2024 this is the new version of this form required for all Realtors to use with their buyers beginning August 17th prior to touring their first property with the buyer I'll go through this form I'll show you how to fill it out properly it's part of a 133-page bundle so if I scroll to the top we see the disclosure regarding real estate agency relationship and you've all seen it before in a purchase agreement or the listing agreement and you'll put your client's information and your information and move on to the actual representation agreement and we put the date that this form is being prepared the name of our client and the name of our brokerage now this formatting has changed with this r Vision this form now has what I call a chart or Matrix where all the key terms are summarized up front and then it's the same stuff down here this is just the corresponding text behind all these key terms so this is like a summary page but we'll go through it it's quite simple actually there are just some important terms you want to pay attention to starting with the representation period you put a beginning date you put an ending date you must have both of those dates if you are missing one or both this form is unenforcable likely void so make sure to have both of these dates now it says not to exceed 3 months if representation period exceeds 3 months this agreement is void unless the buyer's a corporation so we need to make sure that this this representation period is less than three months so that's why I put today's date July 24th and I put September 30th just to make sure it's within that that three-month period of course this form can be extended so don't think that it's only three months and you got one shot and that's it you can do extensions of this form now this is very important this line A2 type of representation and by default this is nonexclusive you are in a non- monogamous relationship with your buyer if you do nothing on this line your buyer can work with plenty of other agents and have other forms just like this signed with them or you can do what I recommend which is check this box and make it exclusive and it's going to tell you that there's something else has to be done an initial on paragraph 15 now keep in mind the nice part of this this chart of the of of terms summarized here on page one is that see how it says paragraph number you can see the cores where to find the corresponding text regarding some of these terms so each term you see up here you can refer later to the corresponding text in this paragraph So we see there's more text in 4B more on this later but in short if you are working for free as a buyer's agent in hopes of getting paid if and when a transaction closes shouldn't you ask for a little loyalty from your buyer you're spending all this time energy resources creating reports doing consulting driving around is it too much to ask this person shows a little loyalty with with an exclusive relationship I think not so that's why I highly recommend checking this box property type check any property type your buyer might may Buy location I checked the county box I put orange orange is a relatively small County geographically relative to let's say neighboring counties like Los Angeles County or Riverside County those are much larger so you have to be careful here because you want to put as much as possible as broad as possible but you can't be too broad because if a if a buyer wanted to contest this the buyer could say well my agent can't reasonably service this you can't put San Diego orange Los Angeles counties because who can service who can properly service a range spanning hundreds of miles so you want to make sure that you put as much here as possible that you can in fact reasonably Service as a real real estate professional do you need to add another another description or be more specific put it in here additional buyer preferences and priorities I now you can check this box and add this form I I wouldn't mess with this that's just me that's how I would do it I don't I don't need to further Whittle down or add limitations based on buyer preferences now if you can think of something that is worth noting go ahead and leave comment but I would skip this right here properties excluded from representation well this is likely going to be a property in which the buyer entered with another agent or may have a commitment to another agent prior to coming coming along with you so if a buyer said hey you know I made an offer on a property it didn't work out they could get back to us and change their mind I don't know but I'm not working with that agent anymore I'd say you know what let's put that property address here so that you know if that seller do come back you can pick up where you left off with that last agent but everything else that's me everything else I'm your agent for but we'll put an exception here all right compensation obviously very important I'm putting 2 and a half% now it asks for percent of the acquisition price and you can add on a dollar amount or you can change this into whatever you put over here or you can make this even more complex and attach a compensation schedule schedule I'm not going to go through any separate documents in this tutorial maybe later but I'm showing you most of the time people are going to put a number here and that number is going to be something like this 2 and a half% now keep in mind obviously the higher the better of course now something else to note if you put a low number here that's the max that you can make from everyone on the transaction so don't do it don't fall in that trap don't put a super low number here to appease the buyer because you can't just collect that you can't collect a half a percent or 1% from the buyer and then get 1% from the seller 1% from the listing broker and think yeah I made my 2 and a half or 3% back nope you're limited to whatever you put here and then they have this verbiage here if broker receives compensation from seller or others for broker's representation of buyer meaning if you get paid from anyone if you're the buyer's agent whoever you get paid from that amount shall be credit against buyer's obligation to pay broker that means whoever gives you money the seller pays you directly the listing broker pays you that is deducted from this number this is a conversation you need to have with your client because in the near future sellers are going to offer either a payment a concession to the to the to the buyer that offsets this or they're going to pay you directly there's even a different form the seller payment to the buyer's broker and if you get paid from the seller you get deducted from here and that gives relief to the buyer so you need to explain what the implications of this are continued right to payment for broker involved properties let's say this thing's going to expire again we only have three months here right and the buyer doesn't want to extend but one of the properties that they made an offer on right before this agreement expired that could turn into a deal that's why you want to have a number here that basically allows a continuation period once this represent representation period ends 30 days is good 60 days is even better the longer the better in my opinion but 30 is just fine now here's something else that's very important cancellation rights so up here if you leave this this type of representation non-exclusive by default which I advise against well either party can cancel and it's effective immediately unless you check this box and write in a number here but it says right here non-exclusive representation okay cancellation is effective upon receipt exclusive remember up here which is what I what I recommend exclusive 30 days after receipt meaning you're giving you have to give a 30-day notice to the other party now of course that can be changed you could change that down here in other terms maybe you only want 15 maybe you want seven maybe you want a wave it entirely it can be changed right here but I'm just saying this right here pay attention to it because this means if you have a exclusive relationship there's a 30-day notice you can't just drop someone overnight because we all know that it's not hard to imagine a buyer getting seduced by another agent canceling the night before they see a property or make an offer the following morning so this gives a cool off period we'll call it so I say leave it alone check exclusive up top and leave it alone all right when should the buyer give you personal fin financial information sooner the better right does a buyer have cash does a buyer have cash to actually do a down payment what are we looking for here proof of funds and we're looking for a lender pre-approval letter if the buyers is obtaining a mortgage that's what we're hoping to get by default 5 days I put three sooner the better it's up to you you'll know when you need to check these boxes down here on this line G2 and this actually could that this can open all sorts of doors to other scenarios but this is going to be more rare so I'm not going to go into detail here if you have questions leave a comment but you'll know if you need to check a box here other terms blank area for you to put in whatever you want all right uh both parties initial you the agent and your client all right and then by by default this form automatically checks this box for a a broker compensation advisory because in this post-settlement world you're you're going to see verbiage everywhere uh warning consumers or advising consumers that commissions are entirely negotiable they're not fixed by law they're not regulated it's entirely up to them they can negotiate whatever they want it's an advisory so that the this this sort of the argument made by the plos in this original lawsuit that that spurred all this that that can't be done again because now everyone's properly advised all right so we go down here I mean you can see right here compensation fully negotiable stuff like that broker right to compensation basically all this verbiage secures I won't read all of it because that would be boring and this could take hours because I could just go on and on about it but basically this gives a little bit of a backstory to all the terms we talked about up here so broker right to compensation getting paid through escrow what what constitutes broker involvement whether your an exclusive or non-exclusive hint exclusive is always better again why you should check the box for exclusive up top so it secures your right to compensation no matter what less ambiguity about an agent with multiple or excuse me a buyer with multiple agents talking to those multiple agents about the same property and then those agents fighting over who actually was involved and then disputing under these terms of broker involvement so that's why you're you're trying to eliminate ambiguity that's the that's the one of the purposes of having a contract this goes on about continuation of compensation which I talked about before and that is getting paid if the transaction or the this agreement expires but the work that you've done during the representation period leads to transaction after the fact that's where that continuation of compensation is timing of compensation basically getting paid the rest go how you're getting paid all right let me scroll through here and see if anything's actually worth mentioning so I would say read through this it all corresponds to what you see up here it just gives a little bit more detail because usually when there's a dispute from a term up top in this Matrix area this chart people need to read down here and say okay what actually constitutes the term what does that mean what is what is broker involvement mean and here it is defined so these offer these lines offer definition agents of relationship blah blah blah this is just boilerplate text broker authorization obligations okay I mean what are the obligations of each party to each other reasonable care I mean it's kind of a snoozefest you can read through it if you want mediation for for dispute resolution good the parties have an issue goes to mediation first by default rather than immediately going to court okay now here's where it gets good again exclusive representation by the way you'll initial on the bottom of these Pages as I'm scrolling through just initial the bottom of these pages okay exclusive representation if we checked exclusive up top like I recommend it says right there on line 2 A2 all right this is another advisory saying basically telling the buyer what it means to be exclusive and they have to read this and they're they're saying by signing this they're not going to enter into another agreement with another agent they're not going to cause a conflict with this agreement and that you are due compensation for the for what you've done broker involvement remember how I showed you there all those definitions of what bro what constitutes broker involvement and it explains the cancellation 30-day notice Etc pretty simple make sure the buyer signs here then it confirms compensation again right there just to really drive the point home it's a bit redundant but that's the that's the litigious world that we're in entity buyer you'll check this box if you're buyer oh look at this so filling this out with my hey T to get this video up as soon as I could I didn't check this box right here you know this make sure to check the box if you have learn from this mistake please if if you put a number here check that box first you always want to check the box if you fill in the the corresponding line next to it that that can cause uh technical problems in the future let me let me check up top if I check the box just go right up to the top so up here you don't have to check the box it would be nice if the people that made this form had this number populate cuz you know how you can put your address in one part of the form or your your name in one part of the form it populates throughout the form they should be doing that here because having having this as a checkbox down here and not up Top This is actually a disservice to agents but I can NP pick these forms all day because they are far from perfect if you have a percentage make sure you check this box all right because this form has a flaw in it at least one all right entity buyer check the box if your buyer an LLC or Corporation or their a a trust any sort of entity and you'll put the name of the authorized signer on behalf of the trust or the entity whatever it is and then buyer is going to sign and if there's more than one buyer or multiple buyers incorporate this form the as say you're going to sign down here and that's it okay so that is the representation agreement itself now I'm going to scroll through this very quickly because this is just boiler plate boring advisories buyer investigation advisory M okay we get it buyer should do investigations and the buyer signs off broker compensation advisory they tell you all these things because again this the post lawsuit litigious World requires the there's going to be just just just hundreds of pages of disclosures in the future and this is all part of them building up okay so fully negotiable additional compensation there could be dual agency uh fully negotiable again you get the idea and we scroll down buyers are going to going to sign possible representation of more than one buyer seller we see this in the purchase agreement it's it's a bit redundant there's a lot of overlap uh in how bundles their forms consumer Privacy Act advisory and then buyer going to sign okay and we made it through 13 pages and hopefully not too long if you have any questions leave it please leave a comment and thank you for watching