Many listings are added into MLS with “NS” included in the Compensation to Cooperating Broker field without understanding what it means and/or what is required when using it.
This code is used only when the listing broker is disclosing that the compensation will be based on the Net Sale price.
If NS is added to the compensation to cooperating field, MLS Rules (Section 7.4) require that the listing broker define in the Compensation Comments field, what concessions will be considered for that listing.
Here are examples of comments that meets MLS Rules: “Compensation excludes seller-paid closing costs.” Or, “Compensation will not be based on repairs or seller credits.”
Why is an explanation required? A cooperating broker has the right to know up front how his or her compensation will be calculated but listing brokers define a net sale differently. One listing broker may deduct seller-paid closing costs while another might deduct repairs. If a listing broker enters NS without an explanation about how the net is calculated, a cooperating broker can require the listing broker to pay on the gross not the net.
“Concession/Net Sale” – a change to selling price, the amount of which is not ascertainable at the time of listing the property due to otherwise negotiated items which reduce or increase the proceeds of the sale to the seller, including, but not limited to the seller’s cost of repairing an unforeseen deficiency in the property, a credit to the buyer for an unforeseen deficiency in the property, payment of the buyer’s closing costs by the seller, and design or construction upgrades which are selected by a buyer for a new home.
Section 7.4 Concessions/Net Sales: A listing broker who plans to base a co-broke commission on the sales price excluding seller concessions shall input the listing with a Net Sales (NS) designation with the compensation in the Compensation to Cooperating Broker field. However, if concession costs are to be deducted and a dollar amount or percentage is impossible to determine at the time of listing, then the listing broker must define the term “concession” in regards to that particular listing, in the “Compensation Comments” field and make it clear to the cooperating broker what their compensation will be based on.
Questions? Contact Donna McGinn at email@example.com or 401.432-6929.