Zillow’s New Touring Agreement

Zillow’s New Touring Agreement

In light of the proposed NAR settlement mandating buyer agents to sign buyer agency agreements before property tours, including open houses , Zillow took action. On April 30, they unveiled a new nonexclusive touring agreement, valid for seven days. This agreement empowers buyers to engage in home tours with agents without the immediate commitment of a buyer agency agreement.

To download a copy of Zillow’s non-exclusive touring agreement, click here.

All you need to know about Zillow’s new touring agreement

Lately, there's been a lot of buzz about the National Association of Realtors' (NAR) proposed settlement. One key change involves requiring written agreements before property tours. In response, Zillow recently introduced a new seven-day touring agreement. This agreement aims to address some of the concerns buyers might have about committing to an agent they don’t really know yet.


Why Zillow created this Agreement?
Let's take a look at the origin of this new touring agreement, The National Association of REALTORS® (NAR) announced on March 15, 2024 a lawsuit settlement that would end litigation of claims brought on behalf of home sellers related to broker commissions. If approved, the settlement is expected to go into effect in mid-July 2024, in this settlement the following “H-58-vi” clause was added:

  • “Requirement for buyer agents to sign buyer agency agreements before showing properties.” It is now a requirement for buyer agents to sign buyer agency agreements before showing properties. The settlement reinforces the practice, already encouraged and sometimes required by local Realtor associations, of having written buyer agency agreements in place before showing properties. The written agreement must be signed before the buyer tours any home, including open houses. The agreement should include:
    a. to the extent that such a REAL TOR® or Participant will receive compensation from any source, the agreement must specify and conspicuously disclose the amount or rate of compensation it will receive or how this amount will be determined (A clear statement regarding compensation from any source, specifying and conspicuously disclosing the amount or rate of compensation the agent will receive, or how it will be determined.)
    b. the amount of compensation reflected must be objectively ascertainable and may not be open-ended (e.g., "buyer broker compensation shall be whatever amount the seller is offering to the buyer")
    c. such a REALTOR® or Participant may not receive compensation for brokerage services from any source that exceeds the amount or rate agreed to in the agreement with the buyer (For example, if a buyer’s agent in North Carolina agrees to a 2.5% commission with the buyer, but the seller is offering 3%, the agent cannot claim the additional 0.5% that exceeds the agreed-upon rate.)

The bottom line: It is going to be a requirement for buyer agents to sign buyer agency agreements before showing properties, including open houses (in reality it only reinforces the practice, already encouraged and sometimes required by local Realtor Associations).

Zillow response: “When done right, agreements can provide transparency, promote open conversation, and foster alignment between the two parties. However, insisting that a buyer sign an exclusive, long-term agreement with an agent, perhaps before even meeting the agent, feels premature. That’s why Zillow has created a non-exclusive touring agreement “ -Errol Samuelson

What does the touring agreement does?

This seven-day agreement empowers potential buyers to tour properties with agents without being locked into a full buyer-broker agreement, offering several advantages for home buyers:

  • Non-Exclusive: The new touring agreement is non-exclusive, meaning buyers are not tied to a single agent. This allows them to explore their options and meet with multiple agents before making a commitment.

  • Transparency: The touring agreement covers touring activities only and does not require compensation or exclusivity. Compensation negotiations and other terms can happen after both parties have met and feel ready to proceed.

  • Reduced Pressure: The agreement eliminates the pressure to commit to an agent before even taking an initial tour.

  • Informed Decisions: Buyers gain valuable insights into an agent's approach and knowledge base before entering a formal agreement.

Things to Consider: More Than Just Tours

While Zillow's agreement streamlines the initial stage to let you take a tour faster, it's important to acknowledge that traditional buyer-broker agreements offer a wider range of services beyond tours. These agreements often include:

  • Negotiation Support: An experienced agent can advocate for you to get the best possible price.

  • Market Insights: Your agent's local market knowledge is a valuable asset during your search.

  • Streamlined Process: Agents handle many of the complexities of buying a home, freeing you up to focus on finding the perfect place.

TOURING AGREEMENT TEXT

TOURING AGREEMENT

This Touring Agreement (“Agreement”) is made by and between [Buyer Name] (“Buyer”) and

[Brokerage Name] (“Broker”) for real property located in the following areas: [Tour Area (MSA, City or Zip)]

(“Location”).

1. Purpose of Agreement.

(a) The sole purpose of this Agreement is for Broker to: (i) consult with Buyer regarding specific

properties; and (ii) assist Buyer in locating and touring properties. These activities collectively

constitute the "Touring Services.”

(b) In connection with providing the Touring Services, Broker shall adhere to any and all

non-waivable duties required under applicable state law for real estate brokers working with a

consumer in a non-agency capacity.

(c) Buyer and Broker agree that they are not entering into an agency relationship and Buyer is not a

client.

2. Buyer's Acknowledgement. Buyer represents that Buyer has not signed an exclusive buyer brokerage

agreement for the Location currently in force with another Broker.

3. Duration of Agreement. This Agreement is entered into this [Month] [Day], 20[year]. This Agreement

shall expire in seven (7) days at 11:59 p.m. on [Month] [Day], 20[year].

4. No Fee for the Touring Services.

(a) Buyer shall not owe or pay Broker any fee for the Touring Services.

(b) If Broker is going to provide Buyer with brokerage services beyond the Touring Services, Buyer

and Broker will enter into a separate agreement for such additional brokerage services. The fee

or commission the parties agree to for those services are not set by law, are fully negotiable, and

shall be documented in that agreement.

5. Equal Opportunity. Properties shall be shown and be made available to Buyer without regard to race,

color, religion, sex (including sexual orientation and gender identity), disability, familial status, national

origin, and as may be required by other local, state or federal anti-discrimination laws or regulations.

Executed by Buyer this _______ day of ___________________ , 20 ____

_________________________ _____________________________________

Buyer Name (Print) Buyer (Signature)

_________________________ __________________________________

Buyer Name (Print) Buyer (Signature)

Executed by Broker this _______ day of _________________ 20 ____

[Brokerage Firm Name] _____________________________________

Broker Name (Print) Individual Agent (Signature on behalf of Broker)

________________

Individual Agent License Number

Copyright © 2024 Zillow, Inc | All Rights Reserved vs041124