BIC TIP #1177: Who Has to Sign Form 220?
BIC in a Basement continues (not in a creepy, locked-up way, Stephen Long assures us, just where he happened to be filming that Sunday). Today’s question comes up constantly: who has to sign Form 220? The short answer is the payee and the payer. The longer answer includes a smart habit that can save you a lot of confusion.
It Is the Buyer Agent’s Contract for Payment
Form 220 is how buyer agent compensation gets locked down in a transaction. Stephen is clear on whose job it is: it is ultimately the buyer agent’s obligation to get a signed Form 220, because that form is their contract for payment.
If you are the buyer agent and you want to know with certainty what you will be paid and by whom, this is your document. Do not wait for someone else to chase it down.
Payee and Payer
So who must sign? The buyer’s agent, as the party being paid, has to sign it. And whoever is doing the paying, whether that is the seller or the listing firm, also has to sign it.
That is the minimum. The person receiving the money and the person paying the money both agree in writing, and the compensation is set.
Why Getting Everyone to Sign Is Smart
Stephen adds a helpful extra: it does not hurt to get everyone to sign Form 220 as a general disclosure. This is especially useful when the compensation in the Form 220 varies from what was in the buyer agency agreement or the listing agreement.
When the numbers change, having all parties sign means everyone has seen the correct compensation in writing. That transparency prevents surprises at closing and protects you from the “I never knew about that” conversation later. Your broker-in-charge will appreciate a file where everyone was informed.
The Practical Takeaway
Buyer agents, Form 220 is your responsibility. At a minimum, get it signed by you as the payee and by the seller or listing firm as the payer. If the compensation differs from what is in the agency agreements, go a step further and have everyone sign as a disclosure. Clear paperwork, clear paychecks.