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With just over two weeks to go until a key deadline, a consumer advocacy group has unveiled a new set of guidelines for seller contracts intended to help protect consumers and ensure full compliance with the NAR settlement requirements.

The Consumer Federation of America (CFA) on Wednesday released its proposed criteria for seller contracts, which are largely consistent with guidance the group issued on buyer contracts earlier this month.

The organization also provided to Inman a copy of an eXp Realty seller contract that is currently being distributed to eXp brokers and agents. This contract is an example of a document that the CFA says is largely consistent with its criteria.

“These criteria will assist regulators, consumer groups, and the industry itself in evaluating the fairness of new seller contracts,” CFA senior fellow Stephen Brobeck said in a statement. “Recent CFA research has shown that these contracts have the potential to harm or help home sellers depending on their clarity and content.”

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Among other provisions, the eXp seller contract includes language that spells out explicitly that the buyer may request a seller concession that would cover a variety of costs, including the “buyer’s broker fee.” It also states that all seller concessions are negotiable, and are not required or fixed by law.

CFA described the eXp contract as “understandable and fair to consumers.” However, the eXp document did appear to depart from some of the CFA standards in a few meaningful ways.

While CFA proposes the seller’s commission “should always be stated as a dollar figure or hourly rate,” the eXp contract provides options to define the seller’s commission in terms of a dollar value, a percentage of the sale price, or an empty “other” field that can be filled in by the broker or client.

Read the CFA’s full list of criteria for evaluating brokerage homeseller contract forms below.

Form: Is the contract readable and understandable?

• Length: The contract should not include marginal provisions designed solely to protect the interest of the broker, and the agency agreement should be in a separate document.
• Type size: Most courts recommend 12-point. Any size smaller will be difficult for some people to read.
• Organization: The most important information, including compensation arrangements, should be at the beginning of the document and clearly labeled.
• Plain language: The contract should be written so that it can be understood by homesellers. It should not contain words and language that can be understood only by lawyers.

Content: Is the content of the contract fair to home sellers?

• Length of contract: The contract should clearly state when it will end.
• Termination of contract: Brokers have the right to terminate contracts at any time; sellers should have the same right with no fees charged.
• Compensation, continuing obligation: A seller can be obligated to compensate a broker who showed a home that was purchased after termination of the contract. But this obligation should last for a reasonable period of time, no more than 60 days.
• Compensation, disclosure: The contract should state prominently that the broker fee is not set by law and is fully negotiable.
• Compensation, commission: The listing agent’s commission should be completely separate from any concession to a buyer that may include funds used to compensate the buyer’s agent. This commission should always be stated as a dollar figure or hourly rate.
• Compensation, fees: In a home sale, any additional fees should be deducted from the commission.
• Compensation, when owed: Only upon successful closing of the sale.
• Seller concessions: Concessions should never include a dollar figure representing buyer agent compensation. Instead, the contract should simply indicate whether the seller is prepared to consider negotiating concessions. 
• Unrepresented buyers: Unrepresented buyers must be shown the property. The contract can include a provision for a modest administrative fee (expressed in dollars) if a buyer is unrepresented and does not cover this cost. This provision should be initialed by the seller.
• Buyer offers: The contract should state that all written offers from buyers will be shown to and decided on by the seller.
• Dual agency: Dual agency should not be pre-approved by the contract. If a dual agency situation arises—e.g., a buyer wants to purchase a listing of the seller’s broker—written seller approval should be secured at this point.
• Seller remedies: There should be no limits on seller remedies. Sellers should not be required to submit first to mediation or arbitration to pursue a grievance.

Read the full eXp seller contract language at this link.

Email Daniel Houston

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When Delian Asparouhov was just a boy, his parents moved from Bulgaria to the U.S. in the wake of the Soviet Union’s collapse. The experience, Asparouhov said Wednesday on stage at Inman Connect Las Vegas, made him a believer in capitalism and the importance of commercial enterprise.

Growing up in the U.S., Asparouhov — who today is a partner at venture capital firm Founders Fund — also became a fan of science fiction and aerospace — so much so that, when he reached adulthood, he began looking for ways to work in the industry. Asparouhov specifically wanted to find ways to make money in space, but, he recalled to the packed Connect ballroom, the technology just didn’t exist to make commerce viable miles above the earth’s surface.

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Then something changed. Asparouhov said that in 2018 and 2019, Elon Musk’s Space X began deploying reusable rockets. He compared the development to the advent of the railroad, which once enabled industrialists like the Rockefellers to ship oil with new efficiency.

“Today, in 2024, these types of rockets launch and land every 36 hours,” Asparouhov said of Space X’s technology. “Somebody clearly built the railroads to space; somebody just had to figure out what the oil was going to be.”

Delian Asparouhov on stage at Inman Connect Wednesday. Credit: AJ Canaria Creative Services

Over the ensuing years, Asparouhov focused on ways to harness that new technology and identify the “oil” to be won by working in space. He eventually hit upon pharmaceutical manufacturing. The idea, he explained, is that without gravity, drug companies can do much more precise chemistry, to the point that at least one popular drug could be converted from an IV drip to an at-home syringe system.

The idea could be revolutionary, but it also sounds ludicrous. Manufacturing drugs in space?

But, it turns out, Asparouhov has apparently already done it. While on stage, he showed the audience pictures of an object that looked like a Starlink satellite. However, he added, it was in fact a capsule that created drugs while in orbit and returned this last February.

“The worst environment they saw,” he joked about the drugs’ incredible journey, “was the UPS truck in Houston.”

Though Asparouhov’s efforts to create an orbital drug manufacturing business are unrelated to real estate, he has invested in real estate startups and said that similar principles apply across industries. The point of his presentation, in other words, was that new technologies have the ability to revolutionize industries.

In space, that new technology was reusable rockets. A century ago, it was the railroads. And today, Asparouhov argued, it could be artificial intelligence.

“It’s as fundamental as the steam engine,” Asparouhov argued.

He consequently urged real estate professionals to lean into and understand new technology, and to be prepared for the changes it might bring.

“There will be fewer agents in 10 years than there are today,” he said, “but almost certainly those agents will be able to handle more client volume.”

Email Jim Dalrymple II

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When Zillow launched in 2006, the site looked nothing like it does today.

There were no listings, no interactive videos and floor plans, or photos that homebuyers and daydreamers could scroll through for hours on end. All the site offered was a comprehensive list of transaction histories that, with some algorithmic magic, turned into the Zestimate — the industry’s first automated valuation model (AVM).

“[It was an] unbelievably provocative, interesting feature that had not existed before,” Zillow CEO Rich Barton recalled Wednesday at Inman Connect Las Vegas. “That Zestimate fueled all kinds of voyeurism and fantasies. It was incredibly entertaining, which is one of the reasons we were mobbed.”

“But it turns out that it is also a critical piece of marketplace information for anyone in the process of moving,” he added. It was this kind of intermingling, this kind of yin and yang of entertainment and practicality that helped create what the Zillow brand is today: this big trusted consumer brand that stands for consumer empowerment and customer advocacy.”

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Barton said the focus on consumer empowerment and advocacy is the key to success for Zillow and the entire industry as it strives to make the dream of a quick, frictionless homebuying experience a reality.

Although the atmospheric rise of artificial intelligence has stoked fear, Barton said focusing on consumer empowerment will ensure that agents will be able to accelerate through change rather than be consumed by it.

“We are accelerating, and that queasiness we’re all feeling is natural,” he said, recalling a recent experience he had racing at 140 mph on a closed BMW track. “As a species, we haven’t really had time to catch our breath and process the last lap around the track, which was the smartphone lap. And now we’re being told to accelerate on the next lap. Here comes AI, [and] around we go again.”

Barton said it’s time to accelerate past the “Portal 1.0 experience” and begin bringing order to a complicated “multi-party, multi-partner, multistage” transaction process by investing in technology, partnering with competitors, and staying in tune with what consumers and agents need to have a positive — even joyful — experience.

“You all may not know this, but less than half of our company’s revenue now comes from buyers agents, lead generation or original business model,” he said. “Our growth and opportunity as a company now comes from investing in this array of digital workflow, tools and technologies for the industry as a whole.”

“Showingtime has been a big success for us. Follow-up Boss, Listing Showcase dotloop, Aryeo … we’ve been putting together these products, building and putting together these products for quite some time,” he added. “We did not build, invest in and integrate these products to keep them inside the walled garden. We did it to make them broadly available and to power your businesses.”

Barton said the next iteration of residential portals will focus on coordination, integration and digitization — the three steps to making buying a home as easy as buying a latte.

“It’s not unlike Brad Inman’s latte transaction [keynote] from 2013. Who remembers that?” he said. “His vision was organizing this mess and saying moving should be as easy as buying a latte. Well, we’re getting there. We’re getting there. It’s taking a while, but we’re getting there.”

Although tech is a key component of bringing Inman’s latte vision to life, Zillow said the plan doesn’t work without people — tech developers and researchers, C-Suite leaders and agent partners.

“This would not be possible if we didn’t have great agent partners,” he said. “It would not be possible if we didn’t prioritize them, and it would not be possible if we weren’t helping drive real business for them.”

“As we accelerate faster to the future, I am really pleased that we are pitching a really big tent and inviting everyone underneath,” he added. “We do not believe this is a zero-sum game. We digitize the industry, and we all win. You grow, we grow, and our customers get what they want.”

Email Marian McPherson