Anyone who has made a written offer must then be disclosed in detail. Disclosure must take place as soon as possible, but before an offer is accepted. The brokerage firm representing the seller must also provide the seller with a written copy of the change to the seller`s written representation agreement if the offer is accepted. As a general rule, the commission is paid to the brokerage company that represents the seller as part of a written agreement representing the seller, which may include an agreement to pay part of the total commission to a cooperating broker representing the buyer. It is important to note, however, that some of the Commission`s models are not mandatory in accordance with THE 2002 REBBA. Different models of commissions are acceptable as long as they comply with the law. In a commission reduction agreement, the listing brokerage agreed with the seller to reduce the previously agreed commission. Below are the two most common ways to do this. “Detailed” disclosure, as described in Section 25, means that the terms of the commission agreement are disclosed, which may affect whether or not to accept an offer to purchase.
The complexity of disclosure depends on the conditions. For example, if the commission reduction agreement is a simple percentage reduction without restrictions or conditions, it must be disclosed. More complex reductions would require more detail. The best method is to disclose in writing to clarify things and establish a record of disclosure. If you are using commission reductions, it is important to establish an appropriate agreement to comply with the Real Estate Services and Business Brokers Act, 2002 (REBBA 2002). The reduction agreements concluded by the Commission can be a means of facilitating a transaction. However, filers are required to ensure that the transportation, documentation and delivery of a commission reduction is carried out in a manner equivalent to the 2002 REBBA. Otherwise, there may be disciplinary or other action. Section 25 of the Code of Ethics contains provisions for commission agreements between a broker and a seller, as well as offers or proposals to amend them. If the brokerage office representing the seller and seller accepts commission terms that may affect whether or not to accept an offer, then the brokerage office representing the seller must disclose the details of these terms to anyone who makes a written offer to purchase. All commission reduction agreements negotiated by brokers and sellers are mandatory for intermediation. When commission reduction agreements are proposed, details must be provided in writing and by the broker or seller to their broker.
Any reduction in commissions should be in line with the brokerage`s guidelines. But in all cases, intermediation is linked by agreements to reduce commissions concluded by their employees on their behalf. Information on commission reductions can be found in the Chancellor`s Bulletin for Clients and Customers.