Describing Commissions on the MLS

Published: February 5, 2010

Describing CommissionsUnderstanding the different ways to describe commissions on the MLS often can be misunderstood. Selling Office Compensation is a required field and must be entered as a percentage or fixed dollar Amount.  In addition, any specific conditions related to estate sales, probate listings, auctions, sales dependent on lender approval or other special circumstances must be entered in Agent Remarks. Below are some typical questions and answers that should help clear the obstacles when placing your listing on the MRMLS Matrix system.

Questions and Answers:

Q. What is a Dual Variable Rate Commission?

A. The CARETS Rules and Regulations section 7.22 provides that a dual or variable commission is one in which the seller agrees to pay a different commission if:

  • The Listing Broker represents both the Seller and Buyer (dual agent) or
  • The Seller finds the buyer themselves: or
  • The Listing Broker is not the Selling Broker.

In situations like these, you must disclose this information by using the Dual Variable Rate field when you add a listing in MRMLS Matrix.

Q. Is Selling Office Compensation based on Gross or Net Sales Price?

A. Selling Office Compensation is calculated on the Gross Sales Price. If applicable, listing brokers can invite a cooperating broker to “contact the listing broker for terms of additional compensation” in Agent Remarks.

Q. Are Conditional Offers of Compensation allowed on the MLS?

A. No. Conditional or discriminatory language regarding the payment of compensation is not allowed in public or agent remarks. Examples of discriminatory language include: “If the listing agent shows the property first to a buyer, total selling office compensation will be reduced to ’x‘%”, or, ’y’% compensation is given for full price offers, or ‘z‘% compensation if offers are less than full price.”

Q. How can I protect myself if the cooperating broker insists on the originally offered commission when the commission is reduced by the lender?

A. The CARETS MLS Rules and Regulations Section 7.15.2, which mirror the C.A.R. Model Rule, allows the listing broker to reduce a commission offered in the MLS to the cooperating broker if the lender reduces the overall gross commission it pays to the listing broker.  In order to receive protection of this rule, a listing broker or agent is required to publish in the Agent Remarks field (a) the fact the sale and gross commission of the listing are subject to lender approval, (b) the amount or method by which the compensation offered through the MLS will be reduced if the lender reduces the gross commission and (c) to disclose the listing is a Short Sale.

Readers who require specific advice should consult an attorney. C.A.R. members requiring legal assistance may contact C.A.R.’s member legal hotline at 213-739-8282, Monday through Friday, 9:00am to 6:00pm.  Broker-owners, office managers, or designated REALTORS® may contact the member legal hotline at 213-739-8350.  Or you may email your questions to [email protected] or fax to 213-480-7724.

Last modified: February 5, 2010 at 8:08 am | Originally published: February 5, 2010 at 8:08 am
Printed: September 25, 2020