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Why did your association change it? We are allowed to have that on there as the listing agency is not in control of what the third party will allow and the seller sure as heck doesn't have the funds. What happened that prompted your association to put the listing agents at risk?
Below is the basic argument for requiring unconditional compensation. The reference to Section 5.0.1 is the NAR model rule that used to require MLS's to allow conditional agreements. This rule was changed, partly based on this argument, to be optional. Subsequently, our MLS (ARMLS) decided to not allow conditional compensation.
ARMLS’s rationale for proposing this change is as follows:
1. ARMLS firmly believes in the unconditional nature of offers of compensation and cooperation.
2. ARMLS firmly believes cooperating parties have the right to know what the compensation will be before they start to sell a property.
3. ARMLS believes this offer of compensation should be unalterable except by mutual agreement of the participants only prior to an offer being submitted.
4. ARMLS believes that the alteration of the offer of compensation through the influence of a third party, not involved in the transaction, violates the premise of cooperation because the modification is not by “mutual agreement” of the participants.
5. ARMLS believes that the current versions of Section 5.0.1, which include the option for a commission reduction at the behest of the lender as a condition of approving a short sale transaction, undermine these core tenets of MLS philosophy and operations.
6. ARMLS believes that obligating MLSs to adopt the current provisions of Section 5.0.1 of the model rules opens the door for further future erosion of the rights of homeowners, brokers, and agents to enter into a transaction under terms upon which they mutually agree without the possibility of tortuous interference by an outside party.
Below is the basic argument for requiring unconditional compensation. The reference to Section 5.0.1 is the NAR model rule that used to require MLS's to allow conditional agreements. This rule was changed, partly based on this argument, to be optional. Subsequently, our MLS (ARMLS) decided to not allow conditional compensation.
ARMLS’s rationale for proposing this change is as follows:
1. ARMLS firmly believes in the unconditional nature of offers of compensation and cooperation.
2. ARMLS firmly believes cooperating parties have the right to know what the compensation will be before they start to sell a property.
3. ARMLS believes this offer of compensation should be unalterable except by mutual agreement of the participants only prior to an offer being submitted.
4. ARMLS believes that the alteration of the offer of compensation through the influence of a third party, not involved in the transaction, violates the premise of cooperation because the modification is not by “mutual agreement” of the participants.
5. ARMLS believes that the current versions of Section 5.0.1, which include the option for a commission reduction at the behest of the lender as a condition of approving a short sale transaction, undermine these core tenets of MLS philosophy and operations.
6. ARMLS believes that obligating MLSs to adopt the current provisions of Section 5.0.1 of the model rules opens the door for further future erosion of the rights of homeowners, brokers, and agents to enter into a transaction under terms upon which they mutually agree without the
possibility of tortuous interference by an outside party.
We are a non-REALTOR MLS and are unconditional for all those reasons. If the listing agent can't get the commission, the buyer agent needs to be able to make a choice when that situation occurs. I can also say that only a small percentage of our short sales close and I am sure part of that is because of the payment issue.
Oh yes, by the way, the buyer agent is also the owner broker of her and her hubby's real estate office. Just the two of them. The listing agent did not receive a commission so there was no split. It was only 3% to buyer agent which of course was paid by me. The buyer agent did not work with the selling agent, she worked directly with me. All negotiations were with me. When I told the buyer agent that I didn't pay the listing agent a commission so there was no split for her to pay out in the law suit, she basically said she didn't care and I shouldn't worry about where the listing agent would get the money to pay it.
Oh yes, by the way, the buyer agent is also the owner broker of her and her hubby's real estate office. Just the two of them. The listing agent did not receive a commission so there was no split. It was only 3% to buyer agent which of course was paid by me. The buyer agent did not work with the selling agent, she worked directly with me. All negotiations were with me. When I told the buyer agent that I didn't pay the listing agent a commission so there was no split for her to pay out in the law suit, she basically said she didn't care and I shouldn't worry about where the listing agent would get the money to pay it.
It does not matter if there was a split or not. The listing brokerage offered the buyer broker a 3% co-broke fee through the MLS. This is a contract between the brokerages that the listing broker must honor.
Also, there is no law suit. This is an arbitration issue that will be decided by the MLS committee. If decided in the buyer broker's favor, the listing brokerage will have to pay the amount outstanding.
The buyer agent is correct that it is not your problem. This is an issue between the two brokerages involved.
So when a broker/buyer agent agrees to reduce her commission from what is offered on the mls, do you change the offering on the mls before or after you sign the contract?
So when a broker/buyer agent agrees to reduce her commission from what is offered on the mls, do you change the offering on the mls before or after you sign the contract?
The commission must be changed either in the MLS or by written agreement between the brokerages prior to contract acceptance by the seller.
I am concerned because the listing agent will in turn file a claim on me for the damages. The listing agreement had a hold harmless statement. I was a seller with a choice, sell or stop paying and foreclose or short sale and all that jazz. As it happened, I paid out $6,800 out of my pocket at closing in order to save my credit. Had she not reduced her commission it would have been $7,900. I didn't have that much to pay, I explained this to her during the negotiations and told her I knew the numbers down to the penny for my payout (I work in mortgage so I am very familiar with the numbers). Therefore if she couldn't reduce commission, I needed $1000 more in the sales price to make up the difference. I couldn't do it if my payout was more than I had in the bank. So instead of going $1000 more in price, she agreed to reduce. And now she wants to be paid anyway.
I just can't fathom that anyone with decency and ethics would allow this woman to win.
If the listing broker tries to collect from you, then I suggest you consult with an attorney regarding your options. I would not get too concerned about it until a decision is made about the commission payment.
Unfortunately, it's not about decency and ethics. It's about what was contractually obligated.
The commission must be changed either in the MLS or by written agreement between the brokerages prior to contract acceptance by the seller.
It would need to be a written agreement outside of MLS I would think. Reason being, if it was reduced after contract, and the said buyer agent had MLS printout at time of agreement, she could say it was changed after contract w/o her knowledge. It's best to get those agreements in writing. I think it's irrelevant what MLS says if they have an outside agreement in writing.
Potential Liability for a Real Estate Commission . .
Quote:
Originally Posted by sherrinav
I am concerned because the listing agent will in turn file a claim on me for the damages.
Instead of going $1000 more in price, she agreed to reduce. And now she wants to be paid anyway.
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SN - We have done 'Fee Listings' for several years. But your 'MLS' may have different rules from ours, and also your state may have different Contract Statutes too.
But, right or wrong, my interpretation is as follows -
-) You signed a (Listing) contract promising to pay your Realty an Advance Fixed Fee AND an additional 3% commission to the Selling Realtor (Which presumably, could have been your Listing Realtor).
-) Subsequently, the Selling Realtor approached you directly, (i.e. bypassing your Listing Realtor) and, in violation of your Listing Contract you changed the "3%" provision (or, at least agreed to terms of sale that excluded or modified the 3%).
-) The 'grey' area seems to be when you say, "She agreed to reduce her commission".
-) The question is, "Is that agreement part of the paperwork (contract?) that you signed with her. OR is it more that she just TALKED ABOUT reducing her commission?"
-) So, you agreed to certain fees/commissions with your Listing Realtor. then agreed to a different commission with the Selling Realtor.
-) Sounds like a good time to go see an attorney to me or, am I missing something here?. . . .
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Potential Liability for a Real Estate Commission . .
