UAR forms update
Forms revisions facilitate national settlement changes
With new changes resulting from the National Association of REALTORS® settlement, the Utah Association of REALTORS® has revised its forms library to comply with these settlement requirements:
- The removal of offers of compensation from the MLS.
- The requirement that REALTORS® sign a written agreement with their buyer before touring a home.
The following is a list of the forms affected by the settlement and a summary of the key features and changes. Each of these forms is available for review in the Forms Library at UtahRealtors.com.
Updated Form: Real Estate Purchase Contract
The Attorney General’s Office has approved updates to Section 4.3 (e) and 4.3 (f) to allow the buyer to ask the seller to compensate the buyer’s brokerage directly in the REPC.
Key features:
- Allows a buyer to ask a seller to pay the buyer’s brokerage fee.
- Clarifies that the seller’s payment is in addition to any compensation sharing agreed to between the listing broker and buyer’s broker.
- Clarifies that the amount of the seller’s contribution shall not exceed the compensation amount agreed to between the buyer and the buyer’s brokerage.
Updated Form: Exclusive Buyer-Broker Agreement and Agency Disclosure
While the form is very similar to the previous version, UAR has updated it to comply with the terms of the settlement and provide flexibility between the buyer and the buyer’s brokerage. REALTORS® should discuss the terms of the agreement with their buyers and ask if the buyer has entered into any other agreements.
This form is effective upon signing and continues to protect the public by establishing a fiduciary relationship with the buyer’s brokerage. Having this form signed prior to showing a property satisfies the requirement for a written agreement in the settlement.
Key features:
- Allows for flexibility for brokerage and buyer to negotiate terms.
- Allows the agreement to be for one day, six months or any time period negotiated.
- States the amount of compensation the buyer is obligated to pay. This is not open-ended.
- Allows the buyer’s financial obligation to be offset by a third party.
- Emphasizes that brokerage fees are fully negotiable.
- Adds an end date to clearly state when the agreement ends.
- Clarifies that the agreement is either county-specific or property-specific, not both.
- States that the brokerage may not accept compensation from any source greater than what is agreed to in the Buyer-Broker Agreement.
- Adds a section to specify any properties excluded from the agreement because of a representation agreement with another brokerage.
Updated Form: Exclusive Right to Sell Listing Agreement and Agency Disclosure
The main changes to this form are in sections 2.1, 2.2 and 2.3 and address compensation sharing. Instead of having the listing and buyer-brokerage fees rolled into one, this form separates them. This clearly delineates how much the seller will pay the listing brokerage and, if applicable, how much the seller authorizes the listing brokerage to compensate to the buyer’s brokerage. This form accounts for the fact that the amount and method of buyer agent compensation is not known at the time the listing agreement is signed.
Key features:
- Allows for flexibility for listing brokerage and seller to negotiate terms.
- Emphasizes that brokerage fees are fully negotiable.
- Adds an end date to clearly state when the agreement ends.
- Specifies in Section 2.1 the amount of compensation for the listing brokerage only.
- Authorizes in Section 2.2 the listing broker to advertise and pay compensation up to a certain amount to a buyer’s brokerage.
- Uses Section 2.3 to authorize the Section 2.2 buyer-broker compensation to be added to the brokerage fee if a written brokerage compensation agreement is established.
Updated Form: Real Estate Brokerage Payment Addendum
This form allows a buyer to request as part of the Real Estate Purchase Contract that a seller help pay the buyer-broker fee. This form may be used less frequently as Section 4.3 of the Real Estate Purchase Contract has been updated to allow the buyer to ask the seller to compensate the buyer’s brokerage directly in the REPC without an addendum.
Key features:
- Allows a buyer to ask a seller to pay the buyer’s brokerage fee.
- Clarifies that the seller’s payment is in addition to any compensation sharing agreed to between the listing broker and buyer’s broker.
- Authorizes the escrow/closing office to withhold the amount specified from the seller’s proceeds.
- Adds a section for additional terms to provide flexibility for various transactions.
New Replacement Form: Real Estate Brokerage Compensation Agreement
Under the NAR settlement, a listing brokerage may compensate a buyer’s brokerage. Because the compensation agreement is now removed from the MLS, this form creates a compensation agreement between the brokerages. This is a replacement to the previous escrow instructions form.
Key features:
- This form is between brokerages.
- For transparency, clients acknowledge the agreement.
- The payment offsets the buyer’s obligation to their brokerage.
- Payment is conditioned upon the successful closing of a transaction.
- Requires brokers to arbitrate if there is a dispute.
New Temporary Form: Addendum to Exclusive Buyer-Broker Agreement
This addendum modifies an Exclusive Buyer-Broker Agreement executed prior to settlement implementation.
Key features:
- Updates the previous Exclusive Buyer-Broker Agreement to make it compliant with the settlement.
- Replaces the language in sections 2.2 and 2.3 of the previous Exclusive Buyer-Broker Agreement.
- This form is not needed for clients who sign the newly revised Exclusive Buyer-Broker Agreement.
New Temporary Form: Addendum to Exclusive Right to Sell Listing Agreement
This addendum modifies an Exclusive Right to Sell Listing Agreement executed prior to settlement implementation.
Key features:
- Updates the previous Exclusive Right to Sell Listing Agreement to make it compliant with the settlement.
- Replaces the language in Section 2 of the previous Exclusive Right to Sell Listing Agreement.
- This form will not be needed for clients who sign the newly revised Exclusive Right to Sell Listing Agreement.
If you have any questions about the new and updated forms, please call the UAR Legal Hotline at (801) 676-5211.