BIC TIP #1185: The 220 Rules Them All
One form to rule them all. Stephen Long wants brokers to understand that any buyer agent compensation offered in the listing agreement is just an incentive. Think of it like a carpet allowance. When it is time to go under contract, the compensation gets set in the offer or on a Form 220, and ultimately, the Form 220 overrides the listing agreement.
An Incentive, Like a Carpet Allowance
When a seller offers buyer agent compensation in the listing agreement, they are putting something forth to attract buyers to come preview the property and potentially write offers. Buyers then know they may not have to pay their own agent entirely out of pocket, because some or all of it is being offered by the listing firm or the seller.
Just like a carpet allowance, it is a marketing tool designed to make the home more appealing. It is not a locked-in, final number.
Sellers Are Not Bound Until There Is an Offer
If a seller pushes back at the listing appointment and says they are not sure they want to offer buyer agent compensation, that is a fair conversation to have. They can offer it, and here is the reassuring part: they are not bound to whatever is in the listing agreement until they receive an offer.
The offer will either have the compensation built into it, or a Form 220 will be attached. Either way, the seller will clearly know how much they are contributing to the buyer’s agent before going under contract. It might match the listing agreement, it might be more, it might be less. It is fully negotiable and reviewed at the time of contract.
Buyer Agents, Lock It Down
Stephen puts the responsibility squarely on the buyer’s agent. It is your responsibility to get that Form 220 signed and executed so you know what you are getting paid. Get it signed by the seller or the listing firm, whichever one will be paying you.
If the compensation changes from what was offered, make sure everyone has that disclosure in writing before going under contract. That way you know what you are getting, they know what they are paying, and everyone can calculate their net sheet and look at the offer in totality.
The Practical Takeaway
Treat listing agreement compensation as an incentive, not a promise. The final word comes in the offer or on the Form 220, signed before going under contract. Buyer agents, get it signed by whoever is paying you. Sellers, review it as part of the whole offer. The 220 rules them all.
