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Article 9.1: Division of Commissions

Posted by MFRMLS Tue, 06 Jun 2006 00:36:00 GMT


ARTICLE 9 – COMPENSATION


Section 1:  Division of Commissions. The listing broker shall specify, on each listing filed with the multiple listing service, the compensation offered to other multiple listing service participants for their services in the sale of such listing. Such offers are unconditional except that entitlement to compensation is determined by the cooperating broker’s performance as the procuring cause of the sale (or lease) or as otherwise provided for in this rule. The listing broker’s obligation to compensate any cooperating broker as the procuring cause of the sale (or lease) may be excused if it is determined through arbitration that, through no fault of the listing broker and in the exercise of good faith and reasonable care, it was impossible or financially unfeasible for the listing broker to collect a commission pursuant to the listing agreement. In such instances, entitlement to cooperative compensation offered through MLS would be a question to be determined by an arbitration hearing panel based on all relevant facts and circumstances including, but not limited to, why it was impossible or financially unfeasible for the listing broker to collect some or all of the commission established in the listing agreement; at what point in the transaction did the listing broker know (or should have known) that some or all of the commission established in the listing agreement might not be paid; and how promptly had the listing broker communicated to cooperating brokers that the commission established in the listing agreement might not be paid.  

In filing a property with the multiple listing service of an association of REALTORS®, the participant of the service is making blanket unilateral offers of compensation to the other MLS participants, and shall therefore specify on each listing filed with the service, the compensation being offered to the other MLS participants. Specifying the compensation on each listing is necessary, because the cooperating broker has the right to know what his compensation shall be prior to his endeavor to sell.*  The listing broker retains the right to determine the amount of compensation offered to other participants. (Updated 11/1996)

This shall not preclude the listing broker from offering any MLS participant compensation other than the compensation indicated on any listing published by the MLS, provided the listing broker informs the other broker, in writing, in advance of submitting an offer to purchase, and provided that the modification in the specified compensation is not the result of any agreement among all or any other participants in the service. Any superseding offer of compensation must be expressed as either a percentage of the gross sales price or as a flat dollar amount. (Updated 5/2010)

Note 1: The multiple listing service shall not have a rule requiring the listing broker to disclose the amount of total negotiated commission in his listing contract, and the association multiple listing service shall not publish the total negotiated commission on a listing which has been submitted to the MLS by a participant. The association multiple listing service shall not disclose in any way the total commission negotiated between the seller and the listing broker.

Note 2: The listing broker may, from time to time, adjust the compensation offered to other multiple listing service participants for their services with respect to any listing by advance published notice to the service so that all participants will be advised. (Updated 4/1992)

Note 3: The multiple listing service shall make no rule on the division of commissions between participants and nonparticipants. This should remain solely the responsibility of the listing broker.

Note 4: Multiple listing services, at their discretion, may adopt rules and procedures enabling listing brokers to communicate to potential cooperating brokers that gross commissions established in listing contracts are subject to court approval, and that compensation payable to cooperating brokers may be reduced if the gross commission established in the listing contract is reduced by a court. In such instances, the fact that the gross commission is subject to court approval and either the potential reduction in compensation payable to cooperating brokers or the method by which the potential reduction in compensation will be calculated must be clearly communicated to potential cooperating brokers prior to the time they submit an offer that ultimately results in a successful transaction. (Updated 5/2010)

Note 5: Nothing in these MLS rules precludes a listing participant and a cooperating participant, as a matter of mutual agreement, from modifying the cooperative compensation to be paid in the event of a successful transaction. (Adopted 11/2005)

Note 6: Multiple listing services must give participants the ability to disclose to other participants any potential for a short sale. As used in these rules, short sales are defined as a transaction where title transfers, where the sale price is insufficient to pay the total of all liens and costs of sale and where the seller does not bring sufficient liquid assets to the closing to cure all deficiencies. Multiple listing services may, as a matter of local discretion, require participants to disclose potential short sales when participants know a transaction is a potential short sale. In any instance where a participant discloses a potential short sale, they may, as a matter of local discretion, also be permitted to communicate to other participants how any reduction in the gross commission established in the listing contract required by the lender as a condition of approving the sale will be apportioned between listing and cooperating participants. All confidential disclosures and confidential information related to short sales, if allowed by local rules, must be communicated through dedicated fields or confidential “remarks” available only to participants and subscribers. (Updated 5/2009)


ARTICLE 9 – COMPENSATION


Section 2: Compensation Required. MFRMLS does not publish listings that do not include an offer of compensation nor does it include general invitations by Listing Participants to other Participants to discuss terms and conditions of possible cooperative relationships. The compensation specified on listings filed with the multiple listing service shall appear in one of two forms. The essential and appropriate requirement by an association multiple listing service is that the information to be published shall clearly inform the participants as to the compensation they will receive in cooperative transactions, unless advised otherwise by the listing broker, in writing, in advance of submitting an offer to purchase. The compensation specified on listings published by the MLS shall be shown in one of the following forms:

A.  By showing a percentage of the gross selling price

    
OR

B. 
By showing a definite dollar amount

If a bonus is being offered in addition to the compensation offered, the separate bonus field should be used to outline the bonus offered. (Updated 1/2014)

Note: The penalty for non-compliance is outlined in the General Fine Schedule (See Article 11/Section 4B).

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Article 9.3: Single Agent/Transaction Broker/Non-Representative Compensation

Posted by MFRMLS Wed, 13 Apr 2011 22:02:00 GMT


ARTICLE 9 – COMPENSATION


Section 3: Single Agent/Transaction Broker/Non-Representative Compensation. Participants in MFRMLS may, at their discretion, choose to offer to compensate Single Agents, Transaction Brokers or Non-Representatives on the same or different terms.

 

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Article 9.4: Participant as Principal

Posted by MFRMLS Wed, 13 Apr 2011 22:04:00 GMT


ARTICLE 9 – COMPENSATION

Section 4: Participant as Principal. If a Participant or User has an ownership interest in a property, the listing of which is to be disseminated through MFRMLS, the person shall disclose that interest in the Realtor Only Remarks section of the listing.

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Articile 9.5: Participant as Purchaser

Posted by MFRMLS Wed, 13 Apr 2011 22:06:00 GMT


ARTICLE 9 – COMPENSATION


Section 5: Participant as Purchaser. If a Participant or User wishes to acquire an interest in a property   listed in MFRMLS, such contemplated interest shall be disclosed, in writing, to the Listing Participant not later than the time an offer to purchase is submitted.

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Article 9.6: Dual or Variable Rate Commission Arrangements

Posted by MFRMLS Wed, 13 Apr 2011 22:07:00 GMT


ARTICLE 9 – COMPENSATION


Section 6: Dual or Variable Rate Commission Arrangements. The existence of a dual or variable   rate commission arrangement (i.e., one in which the owner(s) of record/landlord agrees to pay a specified commission if the property is sold/ leased by the listing broker without assistance and a different commission if the sale/lease results through the efforts of a cooperating broker; or one in which the owner (s) of record/landlord agrees to pay a specified commission if the property is sold/leased by the listing broker either with or without the assistance of a cooperating broker and a different commission if the sale/lease results through the efforts of a owner(s) of record/landlord) shall be disclosed by the listing broker by a key, code, or symbol as required by the MLS. The listing broker shall, in response to inquiries from potential cooperating brokers, disclose the differential that would result in either a cooperative transaction or, alternatively, in a sale/lease that results through the efforts of the owner(s) of record/landlord. If the cooperating broker is a buyer/tenant representative, the buyer/tenant representative must disclose such information to their customers before the customers makes an offer to purchase or lease.

 

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Articile 9.7: Commission Adjustment

Posted by MFRMLS Wed, 13 Apr 2011 22:08:00 GMT


ARTICLE 9 – COMPENSATION


Section 7:  Commission Adjustment. An offer of compensation to cooperating brokers in a potential short sale circumstance which states that it may be adjusted by a third party after execution of a contract for sale and purchase, is an allowed exception to the general rule that offers of compensation must be unconditional. See Article 5, Section 1D for requirements.

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