NAR Settlement Facts - Industry Practice Changes Go into Effect August 17, 2024

The NAR settlement requires specific industry changes that will be implemented on August 17, 2024. Here is a list of the important things to remember:  

1. On August 17, offers of compensation from listing brokers may not be included on the MLS. However, as of today, listing brokers may continue to offer compensation for buyer broker services so long as it is communicated off the MLS (e.g., by email, calls, texts, flyers, newsletter, etc.). Listing brokers should explain to their clients the benefits and costs of the various types of marketing that can be done for a listing and how potential buyers might respond to such marketing, including any buyer costs that the listing broker or seller may offer to pay. A listing broker should inform the seller about costs the buyer will incur, how the buyer might react to those costs, and how the seller can market a house considering the buyer’s costs; but a listing broker must not tell a seller that a broker will steer buyers based on the amount that broker is compensated.  

2. If you have a listing on the MLS that goes under contract prior to August 17, and there was an offer of compensation to a cooperating buyer’s broker/agent at that time, such offer of compensation will apply and will be paid to the cooperating buyer broker at closing even if closing occurs after the August 17 deadline. After August 17, any offers of compensation between listing and buyer broker will need to be put in writing. Unless there are further policy changes in the coming weeks, the UAR will be releasing a Real Estate Brokerage Compensation Agreement for this purpose.

3. In situations where the listing broker is not offering any compensation to the buyer’s broker/agent, the buyer may ask the seller directly in the REPC to pay a brokerage fee to the buyer’s broker/agent. This seller paid commission may be done on the Real Estate Brokerage Payment Addendum to the REPC in the same way Utah Realtors® have done for several years. Such fees are freely negotiable.

4. Written agreements with buyers will be required in Utah and nationwide as of August 17. Such agreements will be required prior to touring properties with the buyer (including live virtual tours). Listing agents holding an open house do NOT need to have buyers sign a written agreement before touring the home. Written buyer agreements are not required when listing agents talk with a buyer on behalf of a seller only.

5. Listing Agreements in place on August 17 – if you have a current listing agreement in place with a client on August 17, you will simply add an addendum to this agreement using a newly approved UAR Listing Agreement Addendum. This new Addendum modifies your current listing agreement to be compliant with the settlement terms and will be made available in the coming weeks. After August 17, you will then be able to use the newly revised Exclusive Right to Sell Listing Agreement with any future clients.

6. Buyer Broker Agreements in place on August 17 – if you have a current buyer broker agreement in place with a client on August 17, you will simply add an addendum to this agreement using a newly approved UAR Buyer Broker Agreement Addendum. This new Addendum modifies your current buyer broker agreement to be compliant with the settlement terms and will be made available in the coming weeks. After August 17, you will then be able to use the newly revised Exclusive Buyer Broker Agreement with any future clients.

7. After entering a written agreement with the buyer, the agent may NOT receive compensation for services from any source that exceeds the amount or rate agreed to in the buyer agreement. In other words, the amount of compensation the broker/agent has negotiated with the buyer on their written agreement is the amount such broker/agent may be paid, nothing more. The written agreement must specify and conspicuously disclose the amount or rate of compensation and it may NOT be open ended (e.g., “buyer broker compensation shall be whatever the seller is offering to pay”).

8. Several Utah forms are in the process of being updated and will be made available to Utah Realtors® in the coming weeks. Watch for communications from the UAR and updates on the SLBR Member Group on Facebook that include written and video explanations of the new forms updates that are coming soon.

** More info to come. Please watch all communications from the SLBR and UAR in the coming weeks. For more detailed information to use at your sales meeting trainings, please read and understand the NAR’s frequently asked questions page at https://www.nar.realtor/the-facts/nar-settlement-faqs. If you have questions about forms or other legal matters, please contact the UAR Legal Hotline: 801-676-5211.