|
The recent National Association of Realtors® settlement (NAR Settlement, August 2024) resulted in significant changes to the way buyer brokers’ commissions are documented and paid at closing. All title agents should consider the following information to ensure buyer broker commission payments are handled correctly.
Look for Two Statements in Every Transaction Each buy-sell transaction should now include two (2) commission statements (one from the listing broker and one from the buyer’s broker) in the documents submitted to the title company prior to closing when submitting figures.
Understand the Documentation There are multiple new documents that articulate how commissions are paid. An attorney should obtain copies of all agreements at the start of the process to confirm that the parties are in full agreement on all terms regarding the payment of buyer broker commissions. These are the new documents (for explanations of each form, click the Read More button, below):
-
Buyer Compensation Agreement
- Closing Cost Credit Clauses in the Contract
-
Commission Addendum Attached to the Contract:
-
Commission Statements:
Careful Lawyering Will Prevent These Trending Issues from Getting in the Way of a Smooth Transaction: Obtain two commission statements to prevent issues in the following areas (for explanations of each, click the Read More button, below):
- Lender Approval
- Conflicting Expectations of Brokers
- Closing Costs Credits – What They Cover
- Closing Cost Credits that Do Not Cover the Entire Amount of Commission Stipulated in the Buyer Broker Compensation Agreement
| 
![](data:image/svg+xml,<svg xmlns="http://www.w3.org/2000/svg" width="1000" height="1000"><rect fill-opacity="0"/></svg>){kind=small}
