The California Association of Realtors logo and a Black man signing a legal document

C.A.R. responds to harsh criticism of its buyer agreement 

The California association said the Consumer Federation of America’s assessment was “misguided” and that its forms will be fully compliant.

June 28, 2024
3 minutes

The California Association of Realtors has been under intense scrutiny in recent days. The organization disclosed last week that the DOJ had launched a "formal inquiry," and a consumer watchdog group released a scathing memo on C.A.R.'s buyer agency agreement this week. 

At issue are various forms the association planned to release this June, as well as a draft version of a new buyer agreement. 

Consumer Federation of America (CFA) Senior Fellow Stephen Brobeck told Real Estate News that his team sent its critiques of the C.A.R. buyer agency agreement to the DOJ "several weeks ago." However, C.A.R. told Real Estate News that it stands by its forms and believes that the recent criticism from the Consumer Federation of America was "misguided" for multiple reasons.

What C.A.R. said about the CFA report: In a prepared response, C.A.R. General Counsel Brian Manson said the CFA analysis of its buyer agreement was focused on "an earlier draft that was still a work in progress," noting that the association "has already made changes that may address many of the concerns from the CFA." He also said C.A.R. "solicits broad input and takes all feedback into consideration" when creating its forms. 

Manson took particular issue with CFA's allegation that C.A.R.'s draft buyer agreement sought to circumvent the new rules mandated by the NAR settlement. 

"The CFA piece says the form doesn't comply with the NAR settlement. That is wrong. Both the draft reviewed and the latest draft of the form comply with all practice changes required by the NAR settlement, as well as with California law," Manson said in the statement. 

"The CFA also suggests that buyers might expect their agents to represent them even if the buyer says they don't have enough funds to pay the broker. They suggest that offers of compensation outside the MLS are attempts to circumvent the NAR settlement, even though the settlement explicitly makes clear this is permitted. The CFA's suggestions are absurd."

Forms align with California law: Manson said that the association's forms "are drafted to comply with California law and facilitate California real estate transactions" and that the CFA report "demonstrates the author's lack of familiarity with California-specific statutory language required for our real estate contracts."

Too nitpicky? C.A.R. also pushed back on the CFA's emphasis on style, arguing that "nearly half" of the 21-page report "consists of commentary on punctuation, capitalization, and the author's opinions on design, rather than substantive legal issues," referring to the section of the CFA report focused on reader comprehension of the draft agreement.

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