Utah Association of Realtors

1 week ago

Hi All,

As you may be aware, the Real Estate Purchase Contract (“REPC”) in Sections 4.3(e) and (f) has been updated to allow for a buyer to ask the seller to compensate the buyer’s brokerage. Let’s take a look at the language sentence by sentence.

“Seller and Buyer agree that Seller shall contribute [ ] ____ % of the Purchase Price to Buyer’s Brokerage or [ ] $_______ to Buyer’s Brokerage, if applicable ("Seller's Compensation Contribution").

This is the amount that the buyer is asking the seller to pay and is now part of the buyer’s offer to the seller. Like any other terms of the offer, the seller may elect to accept, counter, or reject.

“If no box is checked, then Seller has not agreed to compensate Buyer’s Brokerage in the REPC.”

This is meant to highlight that if the buyer hasn’t checked a box to ask for compensation, then the seller is not agreeing to compensation.

“This payment shall be made in addition to any other compensation agreed to by the Seller’s Brokerage to Buyer’s Brokerage, if applicable.”

Since it is possible that the buyer’s brokerage and seller’s brokerage could have already agreed prior to the buyer’s offer for the seller’s brokerage to compensate the buyer’s brokerage, this line is simply highlighting that the REPC will not modify that agreement between the brokerages. In most cases, it will be compensation in the REPC or a compensation agreement between the brokerages. One or the other. Not both.

So, if there is already a brokerage compensation agreement signed between the brokerages, your buyer shouldn’t need to ask for compensation in the REPC. Please talk to your broker or call the legal hotline for clarification on those limited scenarios where you might have both a brokerage compensation agreement and a seller's contribution in the REPC.

“Buyer agrees that Seller’s Compensation Contribution, combined with any other payment from Seller’s Brokerage, if applicable, to Buyer’s Brokerage, shall not exceed the amount agreed to between Buyer and Buyer’s Brokerage in their written buyer-broker agreement.”

This sentence is highlighting that the buyer’s brokerage is not receiving a total amount of compensation greater than that authorized by the buyer-broker agreement.

“The provisions of this Section 4.3(e)(i) shall survive Closing.”

This sentence means that the provisions of this section survive beyond the successful closing of the transaction. The minor changes in Section 4.3(f) of the REPC simply provide authorization to the escrow/closing office to withhold the seller’s contribution to buyer’s brokerage from the seller’s proceeds at Closing.

As always, if you have any questions or concerns, feel free to call the legal hotline at 801-676-5211. ... See MoreSee Less