BIC TIP #1266: The New Form 220 Is Amending Things
The new Form 220 is, let us just say, amending things. In this BIC TIP, Stephen Long explains how the form formerly known as the confirmation of compensation has been rebranded and retooled into the Buyer Compensation Addendum, and how it fits alongside seller-paid closing costs in the offer to purchase.
Same Number, New Job
Form 220 keeps its familiar number, but it has a brand new identity. What used to be a confirmation of compensation form has been turned into a contract amendment, now titled the Buyer Compensation Addendum.
That shift matters. Instead of a standalone confirmation, it is now designed to become part of the contract itself.
When the 220 Rides Along With the Offer
Going forward, Form 220 will likely be attached to an offer to purchase whenever the buyer is requesting that the seller provide compensation for the buyer’s agent.
If your buyer wants the seller to cover buyer agent compensation, that request belongs in the Buyer Compensation Addendum. Make sure it is completed and attached when the offer goes out, so the request is clearly documented as part of the deal.
Closing Costs Are Not Commission
Here is where brokers can get tangled up. The offer to purchase still includes a place for the buyer to request seller-paid closing costs. That has not gone away.
But a request for the seller to pay the buyer agent’s commission is a different animal. That request is handled in the addendum, not in the closing cost section of the offer. Keeping those two concepts separate keeps your paperwork clean and keeps everyone clear on exactly what the seller is agreeing to pay and why.
The Practical Takeaway
When writing an offer, ask two separate questions. First, is the buyer asking for concessions or closing costs? That goes in the offer to purchase. Second, is the buyer asking the seller to pay the buyer agent’s compensation? That goes in the Buyer Compensation Addendum, Form 220.
Get familiar with the new form before you need it, and if you have questions about how your firm wants it used, check with your broker-in-charge.
This BIC Tip is general real estate education for licensees and consumers, not legal, tax, or financial advice. Rules and forms change, so verify current NCREC rules, MLS rules, and standard forms, and consult a North Carolina attorney or qualified professional about your specific situation. See Disclaimers & Disclosures.
