Maryland REALTORS® Online

Don’t Do It – Period!

By Kathleen Dartez
The Director of Legal Affairs for Maryland REALTORS^®’.

Q: I recently changed brokerages. My former broker had an office policy requiring the buyer’s agent to include a copy of the Buyer Agency Agreement with the offer being submitted to the Listing Agent. The broker said that this was the only way the Listing Agent would know that we represented the buyer and were entitled to a commission. My current broker insists that this is illegal, that we should not send a copy of the Buyer Agency agreement to the listing agent. Any guidance?

A: Your current broker is correct. The Exclusive Buyer-Tenant Residential Brokerage Agreement (the “Buyer Agency Agreement”) is a confidential document between the buyer and the broker. The Buyer Agency Agreement should never be submitted to the listing agent.

If you have taken the Brokerage Relationships and Disclosures class recently, you may remember that the Maryland Real Estate Commission has given clear guidance on this. One of the FAQs in that class is:

Q: Is it OK for me to send my signed brokerage agreement as part of my client’s purchase offer?

A: No. Under no circumstances should your brokerage agreement be distributed to the listing side as part of the offer to purchase.

We have heard some brokers say that they must receive a copy of the Buyer Agency Agreement to confirm that they actually represent the buyer. Again, this is contrary to guidance provided by the Maryland Real Estate Commission. The Commission has indicated that if you identify yourself as the Buyer Agent on the last page of the contract, the Listing Agent is entitled to rely upon that, and it is not appropriate for the Listing Agent to require the Buyer’s Agent to provide a copy of the Buyer Agency Agreement.

We were asked this question frequently in 2016, after the elimination of presumed buyer agency, and it’s still a question we see in 2024. It is our strong recommendation that any broker who requires their agents to send a copy of the Buyer Agency Agreement to the Listing Agent when submitting an offer should stop doing so immediately. The most obvious reason would be to be consistent with the Maryland Real Estate Commission’s guidance.

A second reason may not be as obvious but is equally, if not more, important. A brokerage that shares its compensation, fees, or other competitive terms with a competing brokerage potentially opens itself up to an allegation that it has violated antitrust laws.

Price fixing is an agreement among competitors to raise, lower, or maintain prices or compensation levels. An antitrust violation may be found regardless of whether the “agreement” is written, verbal, or inferred from conduct. A plaintiff’s class action attorney could argue that brokerages sharing their compensation and fees with competing brokerages are, by that conduct, conspiring or colluding to establish a fixed or minimum level of compensation. It is possible that a judge or jury might agree.

It is impossible to eliminate all risks, personally or professionally. In recognition of that reality, it is critically important that we control or reduce the risks that we can. Implementing and enforcing a Broker Policy consistent with the Real Estate Commission’s guidance is one way to accomplish this.