Standard Form 202 Explained

The co-operating brokerage does not represent the seller, even though the brokerage may have direct contact with the seller.

To ensure that members understand the legislative requirement to obtain written authority from the listing brokerage before having direct contact with the listing brokerage’s client, OREA developed Form 202, Seller Commission Agreement with Co-operating Brokerage for a Listed Property.

It was becoming increasingly common for the listing brokerage to include on the MLS® listing that all co-operating brokerages are required to contact the seller directly to make arrangements for showings and payment of commission.

The form, which establishes a commission agreement between seller and co-operating brokerage, states:

“This is only an agreement to pay commission (Commission Agreement). The Seller acknowledges that the Brokerage is not representing the Seller and not providing services to the Seller. The Brokerage may be representing the interests of the Buyer, or may be providing services to the Buyer for the transaction. The Seller has listed the property with a different Brokerage, therefore this Agreement is not a representation agreement or an agreement to provide services to a customer as contemplated by the Real Estate and Business Brokers Act, 2002.”

A co-operating brokerage must understand the extent of the authority to contact the seller directly. Is it simply to make appointments for showing the property or does it extend to negotiating commission and presenting offers? If it’s not clear from the listing data sheet, contact the listing brokerage directly and obtain specific written consent to contact the seller.

Clause 3 of the form states that the co-operating brokerage will hold the deposit in the transaction. Again, refer to the listing. If this is not clear, contact the listing brokerage for confirmation.

An alternative to using this form is for the co-operating brokerage to arrange for payment directly from its buyer client. If the buyer client is not comfortable with such an arrangement, the co-operating brokerage may use this form to deal with the issue.