A listing broker offers compensation to cooperating brokers that is different from the amount that you want. Perhaps a listing broker offers no compensation at all because the property, such as a commercial listing or a rental listing, is not required to be listed in State-Wide Multiple Listing Service, or the listing broker and you are not part of the same MLS. 

How can you legally and ethically be paid the amount that you believe that you’ve earned?

• Explain to buyer clients and customers up front how you are paid. Make sure to explain what services you will perform; how much you plan to charge; and who will pay you. Article 12 of the REALTOR® Code of Ethics prohibits cooperating brokers from telling buyers that your services are “free” unless you literally plan to receive zero compensation from the listing broker, seller, or buyer or anyone else.
• Use a buyer representation agreement. The RIAR Exclusive Buyer Representation Agreement offers a way for a buyer and you to agree to your responsibilities and compensation. 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.  If you haven’t used this type of agreement, get “hands on” training at the Accredited Buyer Representative Designation  (ABR) course offered by the Rhode Island Association of REALTORS®.  Register for the next course, which starts on September 12^th. Check with your broker about other training opportunities.
• Negotiate with the listing broker. Make a pitch for why the listing broker should offer you a different amount. If the listing broker and you agree, both of you should sign the RIAR Compensation to Cooperating Brokerage form with the new compensation.
• Build your compensation into the purchase and sales agreement. If the listing broker won’t change the compensation, add language to the purchase and sales agreement with the buyer’s consent. You may have heard that this is illegal or unethical to do, but it all depends on how you word your request. 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 ______.   You could structure this as a seller credit.  You could also make the agreement subject to the buyer paying the commission, but this can be more complicated.  

• If the buyer requires a mortgage, will buyer’s lender allow the buyer to pay and finance compensation to a cooperating broker?
• Will the property appraise? 
  • Not allowed:  This agreement is subject to Listing Broker paying Cooperating Broker a commission of ________.
  • This agreement is subject to Listing Broker paying Cooperating Broker _____% of the total commission.

As always, remember to 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.

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