NVAR First To Release New Forms

Primary changes relfect requirements related to NAR settlements

Bye Bye, Cooperative Commission

The Northern Virginia Assoc. of Realtors is the first to release a set of its revised forms in advance of the August 17th deadline for application of new rules related to the NAR lawsuits settlement.

Mentions of cooperative commission (sellers compensating buyer brokers) have been eliminated from the listing agreement. To clarify, seller subsidies/concessions can still be offered, but not posted on MLS. 

A new section has been added:

Par 8 – Seller Subsidy – Seller subsidies or concessions are payments from the Seller to the Buyer. The amount of Seller Subsidy may be subject to lender limits if not applied directly to a Buyer’s agent.

*Both Fannie Mae and Freddie Mac have indicated that they will not apply seller concessions for commission towards caps.

The VA has previously not allowed its buyers to compensate agents, but has issued a termporary waiver of that rule. There was no mention of a cap.

If the amount is not designated as commission or applicable to a broker, it may fall under cap requirements.

What Can Be Posted On MLS

Seller subsidy (ex.: “Seller offering subsidy of $10k to buyer) can be advertised on the MLS, even after August 17, 2024, but  the amount cannot be limited to, or conditioned upon, the Buyer being represented by a Buyer’s Broker and it must not be designated for commission.

Seller subsidy and seller-paid buyer’s broker compensation is recommended to be negotiated on a case-by-case basis.

Discuss agreement terms and fees

Additional Related Changes

Par 8 – “Broker Fee” changed to “Buyer’s Broker Compensation” for consistency across agreements.
Par 8 – Removed the line for excess compensation in accordance with NAR Settlement Agreement.

*This is because  as of Aug. 17th, Buyer’s Brokers may not retain any additional compensation offered by the Seller or Listing Broker that exceeds the amount agreed to between the Buyer and the Buyer’s Broker in the Buyer Agency Agreement. Remember, buyers will be required to sign a BAA before work with an agent begins.

Par 8 – Added checkbox for Veterans Administration (VA) Buyers/Buyers who require financial assistance to direct Buyer’s Broker to request Seller contribution in all offers. Seller contribution can include Seller Subsidy and/or Seller-Paid Buyer’s Broker Compensation.

9. K1344 – Contingencies and Clauses Addendum. Section 2C for payments to a Buyer’s Broker from a FSBO Seller or builder has been removed as Buyer’s Broker compensation can now be negotiated directly on the sales contract.

Related Posts

Changes To The Residential Sales Contract

Par 2 – A new line-item accounts for Seller payment towards buyer’s brokerage compensation (to be used for deductions from the ALTA). Allows for the Seller and Buyer to negotiate Buyer’s Broker Compensation directly, as part of the contract;

Par 2 – Clarifies that Buyer’s broker can enforce this provision against the Seller using legal “third-party beneficiary” contract principles. Buyer’s Broker does not have to initial this provision or sign the contract unless the amount in this line-item is modified by the parties after ratification;

Par 3 & 27 – A new definition was added for “Business Days.” “Days” in the Deposit paragraph was changed to “Business Days” to allow Escrow Agent to deposit funds in a timely manner;

Par 8 – Virginia Resale Disclosure Act – Revised in accordance with new Virginia law which modifies VA Resale Disclosure Act to allow parties to negotiate the time period for Buyer to cancel the contract after receiving the resale certificate.

The seller must still deliver the resale certificate. Parties can fill any number of days in the blanks in this paragraph, but if left blank, the Buyer’s right to cancel the contract defaults to 3 days.

If “0” days is selected, agents may presemt buyer with Form K1308 – Buyer’s Acknowledgement of Potential Adverse Consequences.
Par 12 – Conveyances – “Trash Compactor” was removed.
Par 22 – Renamed to “Broker Compensation” and simplified.

The Isaacs Team | Compass
error: This content is copyrighted and protected