NAR Lawsuit Settlement – Utah FAQs and Resources


Utah Resources

NAR Resources

Frequently Asked Questions

Utah Changes

How does the NAR lawsuit settlement affect Utah REALTORS®?

Due to decades of proactive, consumer-friendly efforts by Utah REALTORS®, very little will change for Utah homebuyers, sellers, and REALTORS®.

Buyer Agency

Utah REALTORS® are already using written, transparent agency forms with their buyer clients. This part of the settlement will be disruptive and a meaningful change across the country. However, in Utah, it will simply require Utah REALTORS® to use the existing UAR forms as they were always intended. The most practical change to the Buyer-Broker Agreement will be the requirement that it be signed BEFORE showing a home. We anticipate this may actually help our buyer agents establish their relationship formally with their clients. The Buyer-Broker Agreement also already explains that compensation is not set by law and is fully negotiable.

Disclosures to Sellers

The settlement requires listing agents to disclose to sellers any portion of their compensation that will be shared with a cooperating broker. Sellers must also approve in writing the sharing of the listing agent’s compensation. This will not change in Utah as this already takes place in the Exclusive Right to Sell Listing Agreement & Agency Disclosure form. The listing agreement also already explains that compensation is not set by law and is fully negotiable.

Offer of Compensation

While offers of compensation will not be allowed to be displayed on the MLS and while there won’t be an MLS-generated agreement between brokers, Utah REALTORS® are already using the Real Estate Brokerage Commissions – Escrow Instructions form to negotiate compensation with brokerages that are not members of the MLS. This form may be more frequently used going forward, and it may make sense to have this agreed to, at the buyer’s direction, before showing the buyer the property. We are working to simplify the process for initiating and completing this form.

In addition to having their financial obligation offset by cooperating compensation, buyers will continue to have the option to pay the buyer’s brokerage directly or ask the seller to pay the buyer-agent compensation as a concession in the Real Estate Purchase Contract.

Utah buyers are already utilizing these three compensation options or a combination of them. After settlement implementation, the mechanics will change only slightly. UAR has created a diagram that outlines each of the compensation options and how they will work once the settlement takes effect.

Are UAR’s legal forms compliant with the settlement?

While the details of the approved settlement will require minor revisions to certain forms, UAR’s statewide legal forms are already largely compliant with the settlement as proposed. We anticipate making slight changes to the following forms:

UAR will provide training on the revisions as soon as the new versions are available.

Settlement Coverage

Who is covered under the settlement agreement?

The agreement would release the following organizations from liability for the claims brought on behalf of home sellers related to broker compensation:

  • All state REALTOR® associations
  • All local REALTOR® associations
  • All association-owned MLSs
  • All brokerages with an NAR member as principal whose residential transaction volume in 2022 was $2 billion or below

Who’s not covered under the settlement agreement?

For brokerages with 2022 transaction volume above $2 billion, there is the ability to opt in to the settlement under pre-negotiated terms. This will apply to nearly all brokerages not covered.

Agents affiliated with HomeServices of America and its related companies are not released under the settlement nor do they have the ability to opt in to the pre-negotiated settlement. This is also true for the employees of the remaining corporate defendants named in the cases covered by this settlement.

Settlement Changes

When will the practice changes be implemented?

We can expect the practice changes agreed to in the proposed settlement to be implemented by mid-July 2024. However, details and timelines can still change because the proposed settlement is subject to court approval. We can expect the process of court review to take several months or more. In large class action settlements like this one, objections and opt-outs are common, and the plaintiffs and NAR will handle them as they come.

May I continue making offers of compensation in the MLS before July?

Yes, you may continue making offers of compensation in the MLS until the settlement is approved and implemented. It is likely that the changes would be implemented in July.

What are the MLS changes?

The proposed settlement prohibits all offers of compensation on the MLS. It prohibits the MLS from creating or supporting any mechanism for making cooperative compensation offers, even off the MLS.

The MLS is also prohibited from disclosing listing broker compensation or total broker compensation. Sellers will be able to offer concessions on the MLS, but they cannot be conditioned on retaining or paying a buyer representative.

Can a listing broker still offer cooperative compensation off the MLS?

Yes, the proposed settlement does not prohibit offers of compensation to buyer brokers or other buyer representatives outside the multiple listing service.

Can a brokerage offer compensation on their website?

Yes. A brokerage may display data and data feeds from an MLS and offer compensation to buyer brokers or other buyer representatives but only on listings from their own brokerage.

How will buyer brokers get paid without offers of compensation on the MLS?

The types of compensation available for buyer brokers would continue to take multiple forms, depending on broker-consumer negotiations, including but not limited to:

  • Fixed-fee compensation paid directly by consumers
  • Concession from the seller
  • A shared portion of the listing broker’s compensation

Compensation would continue to be negotiable and should always be negotiated between agents and the consumers they serve.

As implementation gets closer, UAR will provide training on the mechanics of each payment option.

What should listing brokers advise their clients about the prohibition of offers of compensation on an MLS?

Listing brokers should inform their clients that offers of compensation are no longer be an option on an MLS after approximately June 2024.

This change will not prevent offers of cooperative compensation off an MLS. It will not prevent sellers from offering buyer concessions on an MLS (e.g., concessions for buyer closing costs).

Compensation would continue to be negotiable and should always be negotiated between agents and the consumers they serve.