Can a cooperating broker unilaterally change the compensation amount?

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A toy house on top of a stack of $100 bills

11/11/2016 | Author: Editorial Staff

A cooperating broker wrote an amount of compensation in the broker-information section on page 9 of the residential contract that's different than the compensation amount I, as the listing broker, offered in the MLS. When I called the matter to her attention, she said that she has always been paid that amount and would neither change the amount nor alter her practice. Can she do that?

No. According to MLS rules, listing brokers must specify the compensation being offered to cooperating MLS participants. These offers are unconditional unilateral offers. The unilateral offer becomes an enforceable agreement between the brokers when a seller and a buyer execute a purchase contract and the cooperating broker is the procuring cause of that sale. Although the brokers can mutually agree to modify the cooperating compensation, neither broker can unilaterally change the compensation as stated in the MLS.

In addition, Standard of Practice 16-16 under Article 16 of the REALTOR® Code of Ethics states that a REALTOR® acting as a buyer's representative may not use the terms of an offer to attempt to modify the listing broker’s offer of compensation or make the submission of an offer contingent on the listing broker agreeing to modify the compensation.

Categories: Legal
Tags: legal, legal faq, contracts, compensation

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The material provided here is for informational purposes only and is not intended and should not be considered as legal advice for your particular matter. You should contact your attorney to obtain advice with respect to any particular issue or problem. Applicability of the legal principles discussed in this material may differ substantially in individual situations.

While the Texas Association of REALTORS® has used reasonable efforts in collecting and preparing materials included here, due to the rapidly changing nature of the real estate marketplace and the law, and our reliance on information provided by outside sources, the Texas Association of REALTORS® makes no representation, warranty, or guarantee of the accuracy or reliability of any information provided here or elsewhere on texasrealestate.com. Any legal or other information found here, on texasrealestate.com, or at other sites to which we link, should be verified before it is relied upon.

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