As REALTORS^® throughout the country begin to implement new practice changes following the National Association of REALTORS^®’ settlement agreement, various forms and tools are being created to meet these requirements. While these new forms aim to satisfy the required practice changes, some may not comply with specific state laws, despite claims to the contrary. Moreover, some forms may contain provisions that limit options for REALTORS^® and consumers and thus may not be appropriate for every transaction.  

A notable example of this issue is evidenced in some national forms created to address the new practice change requiring a written agreement with a prospective buyer prior to showing the property. A close review of these property showing forms raises concerns about compliance with Wisconsin regulations and providing the necessary options for REALTORS^® and their clients. 

Identifying the drafter: One of the first steps Wisconsin REALTORS^® should take when considering the use of any form not approved by the Wisconsin Real Estate Examining Board (REEB) is to identify the drafter. Some property showing forms do not identify the drafter of the forms. Under Wisconsin law, real estate licensees must use forms approved by the REEB, known as “WB forms.” If a WB form has not been approved for a specific transaction type, licensees may only use forms drafted by a party to the transaction or an attorney, provided the drafter’s name is imprinted on the form. See Wis. Admin. Code § REEB 16.04(2). Using forms without the required drafter information is a violation of Wisconsin licensing law and could result in potential disciplinary actions.   

Earning compensation: Another critical aspect of a form to consider is how compensation is earned. Some property showing forms do not allow REALTORS^® to receive compensation for showing a property to a prospective buyer. While the payment of compensation is not a requirement for a valid real estate form in Wisconsin, REALTORS^® are not required to provide real estate services for free. Some forms, such as the WRA’s Pre-Agency Showing Agreement, provide REALTORS^® with the option to negotiate compensation with prospective buyers for services such as showing a property. 

Post-agreement relationship: Finally, another important consideration is whether the form specifies the nature of the relationship between the REALTOR^® and the prospective buyer after the agreement expires. Some property showing forms require the REALTOR^® and the prospective buyer to enter into a buyer agency agreement if further services are provided after the showing agreement expires. The WRA’s Pre-Agency Showing Agreement, in contrast, provides REALTORS^® and prospective buyers with the option to choose a customer or a client relationship after the showing agreement ends. No additional agreement is required if the buyer chooses a customer relationship; the REALTOR^® is required only to provide a Disclosure to Customers form. If the consumer chooses a client relationship, the prospective buyer and REALTOR^® would need to enter into a buyer agency agreement.  

Accordingly, before using any form to satisfy the new practice changes, Wisconsin REALTORS^® should review the forms carefully to ensure they comply with Wisconsin law and contain provisions that provide them with the options they prefer to have in such agreements. Fortunately, the WRA created the Pre-agency Showing Agreement to address this practice change, ensuring compliance and flexibility for REALTORS^® and their clients.

Tom Larson
WRA President & CEO