Utah has been extremely proactive in protecting consumers with written agency agreements and transparency regarding licensee compensation. Utah is well positioned to abide with the terms of NAR’s lawsuit settlement.
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 UAR forms as they were always intended. The settlement requires that a REALTOR, working with a buyer, to get a written agreement signed before showing a home. The UAR strongly encourages the use of the Buyer-Broker Agreement to comply with this part of the settlement. We anticipate this may actually help our buyer agents establish their relationship formally with their clients. The Buyer-Broker Agreement also 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 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® may negotiate compensation-sharing with brokerages.
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 released updates to our forms. Learn about those updates here.
The agreement would release the following organizations from liability for the claims brought on behalf of home sellers related to broker compensation:
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.
Yes, you may continue making offers of compensation in the MLS until the settlement is approved and implemented.
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.
Yes, the proposed settlement does not prohibit offers of compensation to buyer brokers or other buyer representatives outside the multiple listing service.
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.
The types of compensation available for buyer brokers would continue to take multiple forms, depending on broker-consumer negotiations, including but not limited to:
Compensation would continue to be negotiable and should always be negotiated between agents and the consumers they serve.
Listing brokers should inform their clients that offers of compensation are no longer be an option on an MLS after Aug. 17, 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.