Buyer Agent Commissions on Geodoma Do Not Apply to the IPCs Limits

In 40 US states jurisdictions where buyer brokers are able to offer buyer rebates, in full compliance with the Federal Housing Finance Agency (FHFA), Fannie Mae and Freddie Mac (the Enterprises) guidelines, and in accordance with local common and customary practices, Buyer Agent Commissions amounts offered on Geodoma are customarily paid by the seller and are not required to be counted towards the IPC limits for the transaction as described in Selling Guide B3-4.1-03, Types of Interested Party Contributions (IPCs)

By making a fully-optional cooperative offer of Buyer Agent Commission on Geodoma in 40 US states jurisdictions where buyer brokers are able to offer buyer rebates, the home seller agrees to pay all commissions to their seller's real estate broker who, in turn, makes an offer to pay the buyer's real estate broker commission pursuant to cooperative brokerage arrangement made in a real estate brokerage capacity, subject to the Real Estate Settlement Procedures Act (RESPA) 12 C.F.R. 1024.14(g)(1)(v) and 12 U.S.C. 2607(c)(3) exemption.

Geodoma is an independent Fair Display Listings Service, unaffiliated with the National Association of REALTORS® (NAR) settlement in the Burnett et al. and Moehrl et al. cases.

Starting on August 17, 2024, homebuyers working with NAR-affiliated MLS Participants are integrally responsible for the full payment to their buyer brokerage and are bound by a buyer broker agreement (BBA) that requires homebuyers to pay all fees to their buyer broker in accordance with the terms of the settlement in the Burnett et al. and Moehrl et al. cases.

Under the NAR settlement terms, NAR-affiliated MLS Participants fees are the full responsibility of the homebuyer, where Fannie Mae, Freddie Mac, and the FHFA specify limits on how much the seller or their listing broker can contribute to the homebuyer to pay for services the homebuyer is responsible for. The current guidance from Fannie Mae, Freddie Mac, and the FHFA, does not specifically address status of IPCs paid by the seller or their listing broker to offset costs of commissions that are the full responsibility of the homebuyer, but it is highly likely that any such IPCs made toward NAR-affiliated MLS Participants fees, indeed, must fall under IPC limits like all other closing costs the homebuyer is fully responsible for.

In summary, NAR-affiliated MLS Participants who are using Geodoma are advised that any compensation that they receive from the seller are subject to the maximum financing concession limitations if their brokerage operations are further limited by the NAR's settlement terms.

At the same time, real estate professionals who never were, or are no longer NAR-affiliated MLS Participants may continue to share seller-paid commissions pursuant to cooperative brokerage arrangement made in a real estate brokerage capacity, subject to the Real Estate Settlement Procedures Act (RESPA) 12 C.F.R. 1024.14(g)(1)(v) and 12 U.S.C. 2607(c)(3) exemption using Geodoma, where cooperative brokerage commission amounts are not required to be counted towards the IPC limits for the transaction.

Real estate professionals may make a cooperative Buyer Agent Commissions offers only in jurisdictions where buyer agent rebates are allowed by state law. According to the United States Department of Justice, in eleven US states buyer agents are banned from offering rebates: Alaska, Oregon, North Dakota, Kansas, Oklahoma, Missouri, Louisiana, Mississippi, Alabama, New Jersey and Tennessee. In all other jurisdictions where buyer agent rebates are allowed, cooperative Buyer Agent Commission offers may not be contingent upon an increase/decrease of demand/offer price of the underlying property transaction.