Webinar Recap: Standard Forms Update

Chief Legal Officer Hank Lerner, Esq., and Associate Counsel Kacy Clouser, Esq. were joined on a PAR webinar by the Standard Forms Committee Chair Vince Range to review some of the upcoming standard forms changes, which will take effect on Sept. 1. The marked-up versions of the drafts are now available on our website and can be downloaded from the individual forms pages. 

Mortgage Contingency 

Some changes are coming to the mortgage contingency in Paragraph 8 of the Agreement of Sale (Form ASR). The functionality of the contingency itself is not changing, but there will be an additional option for buyers to check off that they will not be obtaining financing as part of the transaction. This means there will now be three choices for buyers: 1) that they will not be getting financing (which means, among other things, that sellers would not have to open the property to appraisals or inspections that a lender might require; 2) waiving the mortgage contingency (a current option, which means that buyers have the flexibility to pay cash or pursue financing, but that their deposit is at risk if they’re unable to close; and 3) electing the mortgage contingency (which provides certain buyer protections if they cannot obtain financing on the negotiated terms). The other change that was very enthusiastically requested is relocating the mortgage commitment date. The new location is its own box right underneath the mortgage contingency box. We know this has been something that many agents were missing, so we hope that it will help. 

Appraisal Contingency Addendum 

There have been quite a few changes to the Appraisal Contingency Addendum (Form ACA). The new form takes parts from the current version and parts from the prior version and merges them together. The first change adjusts how the parties can express the minimum appraisal value.  

Then the most obvious revision is that there will no longer be two options for dealing with a lower appraisal, as the new language combines the best of those two current options into a single contingency. If the appraisal value is met, the buyer has some options on how to cover if there’s a difference between the minimum appraisal value and the purchase price. If the minimum appraisal value is not met, then the buyer has the right to terminate unless they can come to a mutual agreement with the seller. 

 Watch for a more substantive article about the changes coming in the next few weeks. 

Listing Contract Changes 

Earlier this year, some NAR MLS policy changes gave local MLSs additional options on handling certain types of delayed marketing. As a result, paragraph 25 of the Exclusive Listing Contract (Form XLS) has been updated with new language noting that an MLS may have certain marketing options and allowing the parties to identify which, if any, might be utilized. Agents need to discuss the available options directly with their local MLS, and of course, should discuss business decisions related to client marketing with the broker/manager if they have any specific questions on individual listings. 

NAR Changes 

NAR also made several changes to the Code of Ethics at their 2025 legislative meetings, which are discussed here. Generally, the changes addressed the timing of negotiating cooperating broker compensation and where those negotiations can take place. The Agency and Compensation Task Force (which worked on the comprehensive forms updates from 2024) met to review these changes and the evolving use of our revised forms, and ultimately decided not to make substantive changes to our primary transactional forms (listing contract, buyer agency agreements, agreement of sale).  

However, these changes resulted in a few minimal changes to the Cooperating Broker Compensation Agreement (Form CBC). The function of the form is still the same, but to comply with the new ethics rules, language indicating that the form must be completed prior to submitting an offer was removed.  In addition, some small changes were made to the arbitration obligations noted in the form. Members with detailed questions about the potential arbitrability of specific fee disputes should contact their local association (or the PAR Professional Standard Cooperative) with those questions. 

Review 

The remainder of the webinar reviewed how the current forms can be utilized to manage a wide variety of business choices related to broker fees, cooperating compensation and seller concessions. There were some great reminders on those options, and why it is so important to know which is which and be using the proper terminology and forms. Watch the full recording, and thank you to Vince Range for joining us!