Who needs to sign the Cooperative Compensation Agreement (Form 220) when it is attached to a contract as an addendum?
QUESTION: In an Exclusive Right to Sell Listing Agreement (Form 101), the seller agreed that our firm was authorized to offer compensation to a cooperating agent in our listing. A buyer’s agent just sent me a signed Offer to Purchase and Contract (Form 2-T) with Form 220 attached as an addendum. The buyer’s agent checked the box in paragraph 1 of Form 220 indicating that the listing firm would pay cooperative compensation. I signed Form 220, but when the seller signed the offer to purchase, he did not sign Form 220. He told me he did not think his signature was necessary since my firm offered the cooperative compensation. Is the seller correct?
ANSWER: Yes. Although it remains best practice to have all parties sign Form 220, in your scenario you would only need the signatures for the listing firm and the selling firm (firm for the buyer’s agent) to have a binding Form 220.
Paragraph 3 of Form 220 is entitled “Term, Effectiveness and Expiration.” It says that Form 220 “shall be effective when signed by Seller or Listing Firm, as applicable, and Selling Firm.” Paragraph 1 of Form 220 has checkboxes for the listing firm and the seller, and only one checkbox can be chosen between those two options. As explained in Form 220’s Flowchart and Information Guide (Form 220G), whenever either seller or listing firm (whichever party has been checked in paragraph 1) and selling firm sign, then Form 220 is effective.
It continues to be best practice to have the seller sign Form 220 even when the listing firm has agreed to pay the cooperative compensation. After all, the seller is providing the money to the listing firm at closing to pay the cooperative compensation offered and agreed to by your firm. See paragraph 7(c)(i) of Form 101. However, because the seller has already authorized your firm to offer cooperative compensation in the listing agreement, no further authorization or signature from the seller is needed in Form 220, even when it is attached to the contract.
Release Date: 10/23/2025
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