You might have seen our article in e-news two weeks ago about some changes to Bright MLS’s compensation structure. We figured some people may have ignored that if they don’t use Bright, but some of the information in there is important for ALL of our members.
As a reminder, Standard of Practice 16-16 of the Code of Ethics states:
REALTORS®, acting as subagents or buyer/tenant representatives or brokers, shall not use the terms of an offer to purchase/lease to attempt to modify the listing broker’s offer of compensation to subagents or buyer/tenant representatives or brokers nor make the submission of an executed offer to purchase/lease contingent on the listing broker’s agreement to modify the offer of compensation.
This means that the buyer’s agent can’t use their buyer’s offer on a property to try and change the listing agent’s MLS offer of compensation. However, this doesn’t prevent the buyer and seller from coming to an agreement about who will pay the buyer agent’s compensation.
Virginia REALTORS® has created a new item in our Standard Clause Booklet to address this situation. This clause can be inserted into our purchase contract:
Seller agrees to pay Selling Company:
 ________% of Purchase Price
at Settlement pursuant to the brokerage agreement between Purchaser and Selling Company.
This clause can also be used if the offer of compensation in the MLS is less than what you have in your brokerage agreement with your buyer. The language in this clause has been drafted to work with the Virginia REALTORS® purchase contract. If you want to use this language in some other contract, you should consult with an attorney to make sure there are no conflicts.
Importantly, this clause requires that the buyer and buyer’s brokerage have a buyer-brokerage agreement in place to establish compensation. However, as a written buyer-brokerage agreement is already required by law, this shouldn’t be a problem. As with anything in the purchase contract, you should discuss this clause with your buyer before submission and determine what is best for their (and your) situation.