MLS Compensation Offer Has Strings Attached

I thought MLS offers of compensation were unilateral and unconditional, but I’m seeing more conditions, such as full compensation only for full-price offers submitted within a set number of days. What does “unconditional” mean?

Dear Joey: How can an offer of compensation that is supposed to be unconditional appear to be conditional due to language in the remarks section of an MLS listing?

I’m seeing more language in broker or private remarks that place conditions on the offers of compensation. For example: “Agent must present a full price offer within 10 days to receive the full compensation offered in the MLS.”

Is this not a condition on the offer of compensation?

Dear Inquirer: You pose a great question. You are correct, the MLS handbook clearly states that offers of compensation are unconditional and unilateral. A listing broker determines what that offer will be to the other participants in the MLS – but a listing broker can’t place further conditions on that offer should you be the procuring cause.

Having said that, what a listing broker cannot do is make the offer of compensation conditional. If you see that type of language, please contact the local MLS. Ask them to contact the listing broker and remind them of the rules regarding the Offers of Compensation.

The MLS Handbook supports this under G. Commission/Cooperative Compensation Offers which states:

“In filing property with the multiple listing service, participants make 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 by the listing broker to the other MLS participants. This is necessary because cooperating participants have the right to know what their compensation will be prior to commencing their efforts to sell.”

This means that each listing broker makes an independent unilateral offer for each listing. This amount is then specified on each listing to inform other MLS participants of the compensation offered, which feeds into the transparency and cooperation of all subscribers in the MLS.

It can be troubling when you come across language that says, “Agent must present a full price offer within 10 days to receive the full compensation offered in the MLS.” It’s clear this offer is not unconditional. Please contact your MLS. Once it’s reported or discovered, your MLS will contact that listing broker confidentially to get the matter resolved.

Additionally, you may ask, “What if I follow the steps we discussed so far, but the listing broker still refuses to pay?”, arguing that the condition hasn’t been met? In that case, the cooperating broker may need to file for arbitration against the listing broker within 180 days after closing. The cooperating broker’s argument would be that the condition in unenforceable, so the cooperating broker is entitled to the full offer of compensation in the MLS at the time the offer was submitted, regardless of any condition the listing broker attempted to add.
 
All in all, the main tenets of the MLS are cooperation and compensation. For these tenets to work, it’s important for all participants to abide by the rules to the best of their ability. This means making all offers unilateral and unconditional.

It’s also important to keep this in mind: The MLS and associations do not fix, suggest or control amounts of compensation offered. But they can assist in ensuring that cooperation and compensation is upheld.

Joey Sale is the Director of Local Association Services for Florida Realtors
Note: Advice deemed accurate on date of publication

Source: Florida Realtors®