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C.A.R Responds to CFA Report on C.A.R. Buyer Representation Agreement

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The Consumer Federation of America (CFA) yesterday released a report on C.A.R.’s new buyer representation agreement. While C.A.R. welcomes valid feedback, this report is, for the most part, a misguided critique of the forms.

Amid the significant changes facing the industry as a result of the NAR settlement and the recent inquiry from the Department of Justice (DOJ), C.A.R. continues to revise its forms in order to produce the best possible documents for buyers, sellers, and C.A.R. members. Prior to the release of any revised or new forms, C.A.R. solicits broad input and takes all feedback into consideration. This CFA commentary is on an earlier draft of our agreement that was still a work in progress. In fact, C.A.R. has already made changes that address many of the concerns from the CFA.

For example, the CFA piece says the form doesn’t comply with the NAR settlement. That is wrong. Both the draft reviewed and the latest draft of the form comply with all practice changes required by the NAR settlement, as well as with California law. The CFA also suggests that buyers might expect their agents to represent them even if the buyer says they don’t have enough funds to pay the broker. They suggest that offers of compensation outside the MLS are attempts to circumvent the NAR settlement, even though the settlement explicitly makes clear this is permitted. The CFA’s suggestions are absurd. Hardworking buyers’ agents are entitled to be compensated by their clients according to the terms of their agreements. Indeed, that clarity around compensation is the very substance of the NAR settlement. Nearly half the report consists of commentary on punctuation, capitalization, and the author’s opinions on design, rather than substantive legal issues.

C.A.R. forms are drafted to comply with California law and facilitate California real estate transactions. The report demonstrates the author’s lack of familiarity with California-specific statutory language required for our real estate contracts. Moreover, consistent forms that cover myriad situations are important so that buyers, sellers and their agents can efficiently manage complex transactions.

For decades, C.A.R. forms have been the best in the industry for a number of reasons, from transparency to compliance. C.A.R. continues to work diligently to create new forms that will continue that tradition.

June 25, 2024

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