State-Wide Multiple Listing Service Rules and Regulations require listing brokers to offer compensation. However, antitrust laws prohibit MLS from requiring listing brokers to offer a specific amount or split of compensation.

If you and your broker would like to be paid a different amount than what has been offered, here are some legal options:

• Explain to buyer clients and customers how you are paid. It is important for cooperating brokers to explain to buyers how you will be paid. A settlement between the National Association of REALTORS® and the U.S. Justice Department led to a change to Article 12 of the REALTOR® Code of Ethics that prohibits REALTORS® from advertising that your services are “free” or “available at no cost” unless you plan to receive zero compensation from anyone in connection with the transaction.
• Negotiate with the listing broker. If you and your brokerage wish to be paid an amount other than what the listing broker has offered, it is legal to contact the listing broker and/or principal broker of the listing brokerage directly to negotiate. If you agree to a different amount or percentage, make sure to sign the Rhode Island Association of REALTORS® Compensation to Cooperating Brokerage form.
• Make independent decisions about compensation. While it is legal to negotiate compensation directly with a listing brokerage, avoid conversations about this topic with other brokerages. Antitrust laws prohibit real estate licensees from engaging in price fixing or boycotts.
• Build your compensation into the purchase and sales agreement by asking the seller – not the listing broker – to compensate you.

Article 16 of the REALTOR® Code of Ethics prohibits cooperating brokers from using the terms of a purchase and sales agreement to modify the amount of compensation that a listing broker has offered. This does not prevent a cooperating broker and buyer from making a purchase and sales agreement subject to the seller or buyer paying x amount to the cooperating broker.

Allowed: This agreement is subject to Seller paying Cooperating Broker a commission of ______.

This agreement is subject to Cooperating Broker being paid a commission of ______ from the proceeds of the sale.

Not allowed:  This agreement is subject to Listing Broker paying Cooperating Broker a commission of ________.

• Use a buyer representation agreement. The RIAR Exclusive Buyer Representation Agreement includes space for a cooperating broker to negotiate a fee with the buyer. The agreement authorizes the buyer representative to seek compensation from other sources. It also includes an option to require the buyer to make up any difference.

R.I.G.L. § 5-20.6-5 requires designated client representatives to act in the “best interest” of their client. When a DCR for a seller decides what compensation to offer or a DCR for a buyer decides which properties to show, make sure to be open with your clients and act in the client’s best interest.

For more information, please contact the RIAR Legal Department at 401-432-6945 or email [email protected].