How should I handle a dual or variable rate commission agreement under new MLS rules?
QUESTION: With the removal of cooperative compensation offers from the MLS, I am unclear when dual or variable rate commission agreements might come up. Are dual or variable rate commissions still part of the Code of Ethics? If so, how should these commissions be disclosed?
ANSWER: Article 3 of the Code of Ethics requires that REALTORS® “cooperate with other brokers except when cooperation is not in the client’s best interest. The obligation to cooperate does not include the obligation to share commissions, fees, or to otherwise compensate another broker.” Part of the duty of cooperation under Article 3 is – even after the new MLS rules went into effect – explained in Standard of Practice 3-4.
SOP 3-4 defines dual or variable rate commission agreements as “listings where one amount of commission is payable if the listing broker’s firm is the procuring cause of sale/lease and a different amount of commission is payable if the sale/lease results through the efforts of the seller/landlord or a cooperating broker.”
A dual or variable rate commission arrangement may therefore exist in an Exclusive Right to Sell Listing Agreement (Form 101) if the listing firm’s compensation for being a dual agent is different from a blanket offer of cooperative compensation communicated to firms and brokers outside the listing firm. In contrast, a dual or variable rate commission arrangement would not exist when the seller or listing firm is not offering any blanket offer of compensation, and instead negotiates cooperative compensation individually with each potential buyer based purely on the buyer’s purchase offer terms, regardless of whether the buyer is a client of the listing firm or another firm.
If the listing firm and seller have agreed to a dual or variable rate commission, then the disclosure must be made to cooperating brokers “as soon as practical.” Listing brokers need to inform any cooperating broker who inquires about cooperative compensation that there is a dual or variable rate commission arrangement in place and, again upon request only, the differential in rates. SOP 3-4 does not require that the disclosure be in writing, but a writing is strongly encouraged to demonstrate compliance with Article 3.
Release Date: 6/26/2025
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