As of December 16, 2024, the Addendum Regarding Brokers’ Fees (TXR 2406) and the Amendment to Representation Agreement (TXR 2701) will no longer be available for use on the Texas REALTORS® website or through approved form vendors. These forms filled gaps during the transition to the new NAR MLS rules regarding broker compensation.
The Addendum Regarding Brokers’ Fees (TXR 2406) allowed sellers and buyers to agree to the payment of broker compensation in a way that was not available in the One to Four Family Residential Contract (TXR 1601). On December 16, 2024, the updated TREC residential sales contracts will be available on zipForm and other approved forms providers. The updated agreements allow the parties to negotiate seller concessions to cover buyer’s broker compensation within the contract. With the updated forms, TXR 2406 is no longer needed for broker compensation.
The Amendment to Representation Agreement (TXR 2701) was created to allow brokers to easily comply with the new requirements for representation agreements by amending the Texas REALTORS® representation agreements that were in use prior to June 24, 2024. Texas REALTORS® representation agreements entered into after June 24 are already in full compliance and do not need TXR 2701. At this time, REALTORS® should only use the most recent versions of the representation agreements available on iin3d.com and through approved forms vendors.
I’m confused , so we go back to just doing BA and just need to use 1-4 again only?
Yes, Buyer Rep Agreement as it is and the 1-4 Residential Contract will be updated to include negotiations for buyer’s broker compensation.
This is one of those things you need to read slowly, and over again, and again before it sinks in.
As if things weren’t confusing enough.
The TREC website says the new contract goes into effect January 3, 2025. Are we going to have a gap where we are not going to have a compliant form that allows us agents to be compensated? Will the new TREC contract be available for voluntary use on Dec 16, 2024?
That is a great question and one I wondered myself.
I reread the article again and it does say the Contract will be available in Zipform on December 16th, so maybe there won’t be a gap.
I hope so.
If the updated forms allow the buyer’s agent commission (BAC) to be covered through seller concessions, it’s important to remember that federal limits on concessions still apply—ranging from 3% to 6% depending on the loan type and down payment amount. If we’re already negotiating the maximum concession from the seller, does that mean the buyer won’t be able to receive any additional concessions? This is a critical issue that should have been addressed in the article because if it’s fully a seller concession there are limitations therefore it could cause the buyer to be in default, or the deal falling… Read more »
Since the new TREC forms are not mandatory until 1/3/2025, if agents use the existing TREC contract forms, are they still able to use the Addendum Regarding Broker Fees until the new TREC forms become mandatory? This is a very inconvenient time to remove this form with it being mid-December and many agents won’t use the new TREC forms until January. TREC always has an optional period before mandatory so there is a gap here. We need to ensure we can still use the Add Re Broker Fees with the existing TREC contract until the new TREC form is mandatory.
There are two sections in the updated TREC contract in paragraph 12. One for buyer broker fee and another for seller concessions. This way it will not effect seller concession max limits