MLS Rule Reminder

Does the seller know how much you’re paying a cooperating broker?

All listing contracts for properties that are listed in MLS must disclose the amount of compensation that a listing broker will offer to cooperating brokers. The listing broker states on the listing agreement the dollar amount or percentage of the compensation and the seller(s) must initial this particular section. But what if a listing broker offers different amounts to different real estate companies?

The MLS Rules and Regulations allow listing brokers to offer alternative compensation that is higher or lower than what is shown in MLS. Alternative compensation must be disclosed to a cooperating broker in writing before the cooperating broker submits an offer.

Please review these tips before considering alternative compensation:

· What impact will offering alternative compensation have on our company’s relationship with cooperating brokers?

· Will offering alternative compensation hurt or help our sellers?

· Has my principal broker agreed to offer alternative compensation?

· How will I explain our company’s reasons for offering alternative compensation to the seller?

· How will I explain our company’s decision to a cooperating broker?

· Has the company made an independent decision to offer alternative compensation?

· Does the listing agreement disclose all compensation that our company is offering to cooperating brokers?

Never discuss with a competitor that your company offers – or plans to offer – specific alternative compensation to another real estate company. This means no discussions in association meetings, franchise meetings, networking gatherings, social events, etc. Antitrust laws have serious civil and criminal penalties. It doesn’t cost the victim of price fixing or a group boycott a penny to call the U.S. Justice Department.

Questions? Please contact Monica Staaf, RIAR/MLS Legal Counsel, at 401-785-3650 ext. 5 or email

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