NAR Settlement Rule change effective August 17th, 2024

The recent NAR settlement is now in effect. There has been a lot of discussion and a lot of questions regarding the effect of this settlement on new loans. We have tried to narrow this down to the items most important to our partners. If you have specific questions that are not addressed below please contact your local Account Executive for more information.
_____________________________________________________________________

Q1. Can the seller still pay for the buyer’s agent fee?

A1. Yes, the seller can pay for the buyer’s agent’s fee. They can also still contribute towards buyer’s closing costs. Please ensure that the Purchase Agreement or an Addendum to the Purchase Agreement identifies how the agents will be paid and by whom. This will ensure that the CD can be properly prepared. Including the agent fee payments on the LE is not necessary, but is highly encouraged for continuity, as well as borrower awareness, especially for funds to close requirements. If the parties have agreed who will pay the buyer’s agent fee in the Purchase Agreement, the proper split should be shown on the LE.

Q2. Where does the Agent Fee get disclosed on the LE and CD?

A2. The Buyer’s Agent Fee will be disclosed in Section H of the LE and CD. If there is a seller credit being applied to cover for this fee, that will be disclosed on the URLA Lender Loan Information Form (found in Section L4 in Loan Manager) in Section M as a “Seller Credit” from the drop-down menu in items M3-M6. Seller Credits will appear as a lump sum on the LE and CD whether they are being used for the Agent Fee or Closing Costs.

Q3. Can the purchase price be increased to cover the buyer’s agent’s fee?

A3. No, once NDM receives the Purchase Agreement, the purchase price may not increase to cover this fee.

Q4. If the buyer pays the buyer’s agent fee, will this affect the APR?

A4. No, the buyer’s agent fee is not an APR affecting fee.

Q5. Will the seller credit applied towards buyer’s agent’s fee be counted towards the maximum Interested Party Contributions (IPC)?

A5. No*, the portion of the seller credit applied towards the buyer’s agent fees will not be counted towards the IPC. (*Further guidance from Fannie, Freddie, FHA, and VA may be forthcoming, but as of this date they are not counted towards IPC)

Q6. Will buyers need to cover the buyer’s agent fees if no seller credit is offered?

A6. Yes, if the seller does not offer any credit towards buyer’s costs, the buyer must pay the buyer’s agent fee at closing.