Cooperative Compensation Specified On Each Property
The listing broker shall specify, on each property entered into the Service, the compensation offered to other Participants for their services in the sale of such property. Such offers are unconditional except that entitlement to compensation is determined by the cooperating broker’s performance as the procuring cause of sale (or lease) or as otherwise provided for in this rule. The listing broker’s obligation to compensate any cooperating broker as the procuring cause of sale (or lease) may be excused if it is determined through arbitration that, through no fault of the listing broker and in the exercise of good faith and reasonable care, it was impossible or financially unfeasible for the listing broker to collect a commission pursuant to the listing agreement. In such instances, entitlement to cooperative compensation offered through MLS would be a question to be determined by an arbitration hearing panel based on all relevant facts and circumstances including, but not limited to, why it was impossible or financially unfeasible for the listing broker to collect some or all of the commission established in the listing agreement; at what point in the transaction did the listing broker know (or should have known) that some or all of the commission established in the listing agreement might not be paid; and how promptly had the listing broker communicated to cooperating brokers that the commission established in the listing agreement might not be paid.
NOTE 1: In entering a property with the Service, the Participant is making blanket unilateral offers of compensation to the other Participants, and must, therefore, specify on each property entered into the Service, the compensation being offered to the other Participants. Specifying the compensation on each property is necessary because the cooperating broker has the right to know what his or her compensation shall be prior to his or her endeavor to sell.*
The listing broker retains the right to determine the amount of compensation offered to other Participants (acting as subagents, buyer agents, or in any other agency or non-agency capacities defined by law) which may be the same or different.
This shall not preclude the listing broker from offering any Participant compensation other than the compensation indicated on any property published by the Service provided the listing broker informs the other broker in writing in advance of submitting an offer to purchase and provided that the modification in the specified compensation is not the result of any agreement among all or any other Participant(s) in the Service. Any superseding offer of compensation must be expressed as either a percentage of the gross sales price or as a flat dollar amount.
The Service shall not have a rule requiring the listing broker to disclose the amount of the total negotiated commission in his or her listing contract, and the Service shall not publish the total negotiated commission on a property which has been entered into the Service by Participants. The Service shall not disclose in any way the total commission negotiated between the seller and the listing broker.
*The compensation specified on properties entered into the Service shall appear in one of two forms. The essential and appropriate requirement by the Service is that information to be published shall clearly inform the Participants as to the compensation they will receive in cooperative transactions unless advised otherwise by the listing broker in writing in advance of submitting an offer to purchase. The compensation specified on listings published by the Service may be shown in one of the following forms:
- By showing a percentage of the gross selling price.
- By showing a definite dollar amount.
NOTE 2: The listing broker may, from time to time, adjust the compensation offered to other Participants for their services with respect to any property by advance published notice to the Service so that all Participants will be advised.
NOTE 3: The Service shall make no rule on the division of commissions between Participants and non- participants. This remains solely the responsibility of the listing broker.
NOTE 4: The Service, as its discretion, may adopt rules and procedures enabling Participants to communicate to potential cooperating brokers that gross commissions established in listing contracts are subject to court approval; and that compensation payable to cooperating brokers may be reduced if the gross commission established in the listing contract is reduced by a court. In such instances, the fact that the gross commission is subject to court approval and either the potential reduction in compensation payable to cooperating brokers or the method by which the potential reduction in compensation will be calculated must be clearly communicated to potential cooperating brokers prior to the time they submit an offer that ultimately results in a successful transaction.
NOTE 5: Nothing in these MLS rules precludes a listing participant and a cooperating participant, as a matter of mutual agreement, from modifying the cooperative compensation to be paid in the event of a successful transaction.
NOTE 6: Multiple Listing Services must give participants the ability to disclose to other participants any potential for a short sale. As used in these rules, short sales are defined as a transaction where title transfers; where the sale price is insufficient to pay the total of all liens and costs of sale; and where the seller does not bring sufficient liquid assets to the closing to cure all deficiencies. Multiple Listing Services may, as a matter of local discretion, require participants to disclose potential short sales when participants know a transaction is a potential short sale. In any instance where a participant discloses a potential short sale, they must also be permitted to communicate to other participants how any reduction in the gross commission established in the listing contract required by the lender as a condition of approving the sale will be apportioned between listing and cooperating participants. All confidential disclosures and confidential information related to short sales must be communicated through dedicated fields or confidential “remarks” available only to participants and subscribers.