August 17th NAR Settlement Changes

You will use the short form (see question 7 for more on the short form) to outline the fees for services that you have agreed to with your client. Payments will be made to the brokerage (JPAR - Real Estate) through a payment form process outlined in Dotloop. 

Customer Interaction

1. You will start a new loop
2. Send out the “ JPAR Buyer Education and Acknowledgement” form
3. Review the agreement to ensure the buyer understands the form before they sign
4. Follow up with the short form in Dotloop that outlines the fees you are charging and the services being provided
5. Send out the payment form jpar.re/AgentPaymentRequest

Compliance Team Interaction

1. Ensure you have any and all signed agreements (short forms, long forms, agency agreements) uploaded into Dotloop within three days of all parties signing. If you are using the Dotloop system you can send forms to be signed directly from the system and they will be available immediately without any extra effort on your part. 
2. The payment form, sent from Dotloop, will automatically tie the payment made by your client to you. 
3. For a' la carte services that you charge, the processing fee is a flat 10%. The processing fee has a max of $500. For greater clarity: 
   1. if you charge $400 for services, the processing fee is $40. 
   2. If you charge $4,000 for services, the processing fee is $400. 
   3. If you charge $6,000 for services, the processing fee is $500
4. PLEASE NOTE - If the compensation you are receiving is tied to a closing, the standard transaction fee structure will be used. The structure outlined here is only for a' la carte services offered that would be paid upfront or before the point of closing. 

Have a buyer sign the TXR-2701 AMENDMENT TO REPRESENTATION AGREEMENT

Have a buyer sign TXR-1505 AMENDMENT TO BUYER/TENANT REPRESENTATION AGREEMENT

If they choose to continue offering Broker to Broker Compensation, have a seller sign TXR-2701 AMENDMENT TO REPRESENTATION AGREEMENT 

If they wish to negotiate Seller to Buyer Broker Compensation, opting to utilize the preferred method of Seller Concessions, have the seller sign a new listing agreement JPAR RESIDENTIAL REAL ESTATE LISTING AGREEMENT EXCLUSIVE RIGHT TO SELL and in the Special Provisions paragraph state the following “This listing agreement will replace the previous listing agreement dated {date}”. Add both to your loop in Dotloop. 

You should NOT call to see if compensation is being offered prior to scheduling showings. If you do this, you are putting yourself, and your brokerage, at risk of liability for steering. To learn more about steering visit this NAR Resource.  If the buyer says they do not want to view any homes that don’t have published offers of compensation for the buyer’s agent, you should remind them that requests for seller concessions can be written into a purchase offer. 

If you have a buyer who is interested in making an offer on a property, and the buyer has requested that you see if there will be funds to help them cover their costs for items like closing costs, repairs, or their compensation to you, the buyer’s representative, you can call before drafting your offer. 

The question should be “ Are you paying broker-to-broker compensation or is the seller open to concessions?”

If the listing broker is paying broker-to-broker compensation, ask how much it is. Follow up with TXR-2402 COMPENSATION AGREEMENT BETWEEN BROKERS and have the listing agent sign it prior to drafting the offer for your buyer. 

If a Seller is open to concessions, and your buyer is concerned that they won’t have enough cash to cover the full costs to close on the property, you can ask if the seller has authorized a specific percentage of the home’s purchase price or a set dollar amount to help cover buyer costs. That amount, if provided, will be for ALL  concessions and not just for buyer agent compensation. The amount of concessions and buyer agent compensation will be negotiated in the sales contract between the buyer and seller. 

Yes, if your Seller has elected to set an amount they are willing to pay to cover the costs of Buyer Agent Compensation, you may advertise through flyers, sign riders, and social media, but not the MLS. 

However, we recommend that you utilize the “JPAR Seller Education and Acknowledgment” form to ensure your Seller understands their options and that you educate them on the reasons why it may not be in their best interests to preset or pre-publish an amount that they are willing to offer in seller concessions. 

The intent of the NAR settlement is to decouple commissions, meaning the Listing Agent’s Brokerage will no longer be paying the Buyer Agent’s Brokerage. Our recommendation is to secure a listing agreement with compensation outlined only for the Listing Brokerage Compensation. We do not think it is in the best interest of the Seller to guess at the rates and fees negotiated between the buyer and their representative. The preferred method is to use the checkbox that notifies buyers and their agents if the seller is open to receiving purchase offers that contain requests for Seller Concessions to cover the Buyer’s associated costs to close. 

This can be used if you are performing showing services or other specific a'la carte services for a buyer.  You may find that you start with a short form and then move to the long form once you’ve established that you, and your client are a good fit and ready to move to a more formalized and longer term fiduciary relationship.

If your buyer chooses a new construction home that is offering a bonus, you are obligated under your fiduciary relationship to notify the buyer of the additional cash that is being made available. That bonus can be used to offset the fees that the buyer has agreed to pay you, as their representative, in the Buyer Agency agreement that you’ve both signed. If the buyer has already covered their costs as negotiated in the agreement you signed, the buyer may elect to sign an amendment to the buyer representation agreement that will add the bonus to the amount you had previously negotiated for your services. The buyer may also elect to use the bonus to help reduce their costs to close.

If you are hosting an open house for your listing, or a JPAR listing, no additional forms are needed for buyers to come in and look at the home.  You could, as an added benefit to the general public, share the “JPAR Buyer Education and Acknowledgement” form so the buyer can become educated on the agency and compensation process following the August 17th changes and also direct them to the NAR site for buyers.

Please scroll down on this page to view the videos of Tony Delgado’s trainings on how to fill out the forms.