How to Handle Cooperative Compensation and Buyer Agency Agreements

QUESTION: I represent several buyers. In each agency agreement, I have agreed to work for a specific amount of compensation, as required by the License Law and MLS rules. One of the houses I showed to a client has offered cooperative compensation sufficient to cover my fee and an additional bonus that would result in my getting paid more than what is in the agency agreement. Another house I visited with another client is not offering enough cooperative compensation to cover all of my fee. How should I handle these scenarios?

ANSWER: MLS rules require that every buyer agency agreement have a provision that prohibits an agent from “receiving compensation for brokerage services from any source that exceeds the amount or rate agreed to in the agreement with the buyer.” (Emphasis added.)

It is very important to fill out the compensation section of a buyer agency agreement to make sure it states the specific amount you expect to be paid for your services. This is true even if you use the Non-Exclusive Buyer Agency Agreement (Form 203), which has a checkbox feature to indicate whether the buyer will be liable to pay the firm’s fee or not. Failure to state a specific amount of compensation in a buyer agency agreement may result in discipline, a fine, and even forfeiting the right to be paid at all. See N.C.G.S. § 93A-13 and Rule 21 NCAC 58A .0109(c).

Since MLS rules prohibit the receipt of compensation that exceeds what is in the buyer agency agreement, amending your agency agreement to add a bonus is problematic. Buyer agency agreements cannot be amended to simply match or reflect what a seller or listing agent is offering as cooperative compensation if it exceeds the amount agreed to in a buyer agency agreement. See NAR Member Resource: Dos and Don’ts When Working With Buyers.

In the future, you may want to consider adding the potential for a bonus in your buyer agency agreement on the “Other Specific Amount” line along with some language making it clear that it will only be payable if offered by the seller or listing firm. Make sure that the bonus is also a specific amount, and do not use a qualifier like “up to __________.”

All that said, if an amendment to increase compensation in a buyer agency agreement complies with the settlement, then it may be permitted. For example, if the original fee in the agency agreement contemplated touring one home, but now the buyer wants to tour many homes, then an amendment for more compensation may be appropriate. Or, an amendment to increase compensation may also be appropriate if the amendment means your client receives a rebate or other benefit. This recent interview with Lesley Muchow, NAR’s general counsel, offers further insight. In your situation, be sure to ask your BIC about the bonus to make ensure that if you do amend your buyer agency agreement, then you are doing so in compliance with MLS rules.

If the cooperative compensation offered by a seller or listing firm is not sufficient to cover your fee, then the Exclusive Buyer Agency Agreement (Form 201) obligates the buyer to pay the difference. You can either ask your client to pay the difference, or you can waive the difference in a writing or by an amendment to the agency agreement using Form 710. Ultimately, either choice is a business decision that you and your firm will need to make.

Release Date: 3/6/2025

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