Will a buyer agent be entitled to MLS cooperating compensation if closing happens after July 2024?
QUESTION: As a buyer agent for clients looking to relocate to North Carolina, I am concerned about the NAR antitrust settlement and the upcoming rule changes expected in just a few months. If my buyers go under contract before July, and then they do not close until after the new MLS rules take effect, will I be entitled to the previously advertised cooperating compensation?
ANSWER: While we believe that existing offers of compensation will remain valid, this assumption may change if the new rules explicitly address this question. As of now, closings that occur after the effective date of the revised rules should proceed as usual, which means that cooperating compensation earned prior to July will still be due if a closing occurs after the new rules take effect.
We have previously written in detail about amending MLS offers of cooperating compensation and when that compensation is deemed earned here. Generally, once the offer is submitted on behalf of the buyer, the buyer’s agent is entitled to the offer of compensation being advertised at that time, and it is payable when the transaction closes.
Both the current MLS rules and general principles of contract law support this outcome. However, given the fact that the rules are being modified pursuant to the antitrust settlement, we do not know yet exactly how the transition to the new rules will take place and the effect on pending cooperating compensation. Regardless of any changes to come, Standard of Practice 3-2 will prohibit a listing broker from unilaterally modifying the offer of compensation to a buyer agent who has already submitted an offer to purchase the listed property.
In the meantime, consider using Form 220, as we discussed here, to confirm any commission agreements and to have a record of your expected compensation. Taking a quick screenshot of the MLS advertisement when making your buyers’ offer would be useful to record the compensation offered at that time along with any property disclosures. Your MLS will also continue to monitor and record changes to listings so that there is a record.
We will continue to monitor the NAR settlement and provide further updates as details emerge.
Release Date: 4/25/2024
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