TOP FIVE LEGAL TAKEAWAYS FROM 2025

BY “LEGAL JOHN” WAIT General Counsel

You may recall that the year 2024 was a particularly hectic one in the real estate brokerage landscape. It was the year we learned about the settlement and began implementing new MLS rules. It was also the year that new forms were designed to help members adjust. First, it was new residential buyer agency agreement forms. Then, it was on to the residential listing agreement, among other changes.

All through 2025, NC REALTORS® officers, leadership, staff, teachers, volunteers, and many, many others, did their level best to support you and assist. So, it is no surprise that most of the Legal Hotline calls we received at the beginning of the year focused on settlement compliance, the new agency agreements, and compensation.

However, as the year went on, the Hotline calls began circling back to some of the old favorites, like material facts and how to handle a difficult client. And when settlement questions did come up, it was very encouraging that the conversations were more about why settlement compliance was important, and not just about dotting i’s and crossing t’s.

As you all continue to grow, adapt, and learn how to best help your clients reach their real estate goals this year, let’s review the top five questions from the Legal Hotline in 2025.

1. If I am representing a buyer, what should I do if a seller or listing firm is offering more compensation than what is agreed to in the buyer agency agreement?

In nearly all these scenarios, you should ensure that the additional compensation is given as a credit to your buyer.

MLS rules require that every buyer agency agreement have a provision that prohibits an agent from “receiving compensation for brokerage services from any source that exceeds the amount or rate agreed to in the agreement with the buyer.” Therefore, before you sign, it is very important to fully complete the compensation section of a buyer agency agreement to make sure it states the specific amount you will be paid for your services, including any potential bonuses offered by the seller or listing firm. Under MLS rules post-settlement, amending a fully executed buyer agency agreement to add compensation will not be possible in most cases. However, you can reduce your compensation at any time and for any reason.

All that said, if an amendment to increase compensation in a buyer agency agreement complies with the settlement, then it may be permitted. To make sure any potential amendment to increase compensation complies with the settlement, talk with your Broker-in-Charge first.

2. What is the best way to document buyer agent compensation in the forms?

For many years, North Carolina prohibited brokers from including their compensation in any pre-printed purchase contract, including the Offer to Purchase and Contract (Form 2-T). That prohibition ended when Session Law 2025-52 (Senate Bill 690) was enacted in July 2025.

Even though the law has changed, you may continue to negotiate commissions just as you always have postsettlement. However, taking advantage of the new law is strongly encouraged. It will ensure buyer agent compensation is more clearly communicated to and paid by the seller, and it will create fewer issues around whether a counteroffer has been made during negotiations.

Until the Forms Committee adopts changes, you may use an attorney-drafted custom addendum or attach Form 220 as an addendum to the purchase contract.

3. If a seller reaches out to me from out of state, what is the best way to protect myself from a fake seller scam before we sign a listing agreement?

IF YOU ARE SELLING PROPERTY FOR SOMEONE YOU HAVE NOT MET IN PERSON, ASSUME IT IS A SCAM UNTIL PROVEN OTHERWISE.

Scams continue to be a growing issue. When it comes to listings, agents must be vigilant. There are several steps you can take to try to avoid a scam, including, but not limited to, the following:

• Require a government-issued photo ID.

• Require a live, face-to-face, video chat with the seller. A seller’s refusal to speak live on video is a major red flag.

• Visit the property in person and confirm the seller knows the details.

• Cross-check the seller’s identity on tools like Forewarn.

• Talk to neighbors.

• Ask for ownership documents or utility bills only the owner would have.

• Be wary of pushy sellers, especially when it comes to money.

• Research recent listings and withdrawals. If the parcel was recently listed, withdrawn, or sold, speak to the prior listing broker to see if a fraud attempt was previously made.

4. Do I need to disclose damage to a property, even after the damage has been fully repaired and remediated?

In most cases, repaired damage to a home is going to be a material fact that must be disclosed under the License Law. In other cases where it may not be clear if repaired damage is a material fact, agents should err on the side of disclosure.

The North Carolina Real Estate Commission has said that a “material fact is any fact that could affect a reasonable person’s decision to buy, sell, or lease real property.” All brokers have a duty to discover and disclose material facts. Since repaired damage to a property is a fact that would likely affect a reasonable buyer’s decision in the buying process, it falls within the definition of material fact in most cases.

However, even if you discover repaired damage on a listing that is not significant or recent, disclosure should be strongly considered for several reasons. First, property damage often leads to insurance claims. Second, it is increasingly common for buyers who learn of repaired damage after going under contract — even small or not very recent repairs — to pursue claims for the return of their Due Diligence Fee, Earnest Money Deposit, inspection fees, and more.

In either case, discovering, investigating, and disclosing as much repaired damage as possible on a listing prevents these sorts of claims by a buyer, whether well-founded or not. Even if a buyer’s claim about alleged non-disclosure of repaired damage is not well-founded, a buyer’s demand to be reimbursed is stressful for listing agents and sellers.

5. What should I consider when “co-listing” or doing “co-brokerage” with an agent from another firm?

First, both agents should check with their respective MLSs to confirm whether co-listing is allowed and whether there are any special requirements. Second, both firms need to ensure compliance with the License Law.

Each firm will owe full agency duties to the seller, including the duty to discover and disclose material facts. This means both firms could face liability for the acts or omissions of the other. It also means all agents involved should have a clear understanding of who will handle advertising, showings, and negotiations.

It is very important that each firm’s name appear in all advertising in a way that does not cause confusion.

If after considering the foregoing each firm still wishes to proceed, then each firm may execute its own Exclusive Right to Sell Listing Agreement (Form 101) with the seller. The listing agreements will each need custom addenda to address total compensation, each firm’s split, cooperative compensation (if any) in each MLS market, and any other issues that may arise. Strong consideration should be given to having an attorney help draft the custom addenda.

Co-listing firms may also want to have a custom, separate written agreement between themselves to address how marketing expenses will be shared, liability for damages to the property or to a person touring the property, and detail about how listing responsibilities may be divided.