Maryland REALTORS® Online

The Best Buyers' Agents Follow Maryland Law. Here's How.

By now, we’ve all heard about NAR’s proposed Settlement Agreement in the Burnett/Spitzer class action litigation and have had some time to consider what it means for us, as real estate professionals and, more importantly, what it means for our clients. In the 100+ page Agreement, there are a few key “Practice Changes” which will have the most significant impact on how we conduct our day-to-day business.  

Let’s start with the good news. One provision of the Agreement requires that all REALTORS^® representing buyers enter into a written brokerage agreement before touring a home. Maryland law has required the use of written buyer agency agreements since October 1, 2016, so REALTORS^® in Maryland should already be very comfortable with this practice.  

If you’ve taken the Brokerage Relationships and Disclosures class recently, you may remember a FAQ related to when a buyer’s agent needs to have the buyer brokerage agreement signed. The Maryland Real Estate Commission’s answer is “Before you provide any real estate brokerage services you must have a written and signed brokerage agreement in place.”  

This information is, of course, consistent with the Maryland Real Estate Brokers Act. The Brokers Act defines “provide real estate brokerage services” as engaging in any of the following activities: 

(1) for consideration, providing any of the following services for another person: 

(i) selling, buying, exchanging, or leasing any real estate; or 

(ii) collecting rent for the use of any real estate; 

(2) for consideration, assisting another person to locate or obtain for purchase or lease any residential real estate.  

For additional certainty, MREC has provided guidance on what activities an unlicensed assistant may or may not perform, within the scope of “providing real estate brokerage services.” The guidance is clear that an unlicensed assistant may not, among other things, show property because showing property is “providing real estate brokerage services.”  

Although Maryland law does allow you to show a property to an unrepresented buyer, you are required to utilize the Understanding Whom Real Estate Agents Represent form in that situation. This document clearly established that you do not represent the buyer, it does not provide the buyer with the benefit of representation or create a fiduciary relationship between you and that buyer/customer, nor does it set forth any agreement as to whether and in what amount you will be paid. It is our strong recommendation that agents enter into written Buyer Agency Agreements before showing a home. Many brokers are offering additional training opportunities to their agents to help them explain the value they bring to the transaction and the importance of creating that real estate brokerage relationship prior to showing a home. Maryland REALTORS^® will be offering NAR’s Accredited Buyer’s Representative (ABR) course in May. We encourage all of our members to consider taking the ABR training or completing any training courses offered by your brokerage. 

Stay tuned for additional guidance on upcoming changes to the MLS and how offers of compensation may be made.