BIC TIP #1305: Using the New Form 220 With the Contract

The contract and Form 220 go together like love and marriage. Stephen Long, your Notorious BIC, explains that the new 220 is still the 220, but it operates a little differently. It is now called the Buyer Agent Compensation Addendum, and if you want the seller to contribute to your compensation, it needs to be attached to the contract the right way.

Your Compensation, Your Responsibility

As a buyer’s agent, it is your responsibility to address seller-paid compensation if you want it. If you want the seller to contribute to your compensation, you need to include that request as an addendum to the Offer to Purchase and Contract using Form 220.

Nobody else is going to do this for you. If the addendum is not there, the request is not part of the deal.

Where Do I Mark It?

The most common question Stephen hears is, “Where do I mark that on the contract?” Look at the addenda section of Form 2T. There are several options for various addenda, including one marked Other.

Check Other and write in that Form 220, the Buyer Agent Compensation Addendum, is attached. That simple notation ties the addendum to the contract.

One Instrument, Not Two

Why does that matter? Listing the addendum in the contract makes the contract and the addendum one instrument. One is no good without the other. The parties cannot sign just the contract and skip the addendum, or sign just the addendum and skip the contract.

Both have to be in play for the compensation terms to be effective and enforceable. That is the love and marriage part: they go together.

The Practical Takeaway

If you are asking the seller to contribute to your compensation, complete Form 220, check Other in the addenda section of the contract, and write in that the Buyer Agent Compensation Addendum is attached. Make sure both documents are signed together. It is a fairly simple form, so take a look at it before your next offer, and ask your broker-in-charge if you have questions.