*Please note: Any questions regarding Legal Hotline Spotlights should be submitted via the Virginia REALTORS^® Legal Hotline. Our attorneys are unable to respond to questions through our comments section.

Q: If a listing firm or seller offers cooperative compensation in excess of the amount agreed to in my buyer brokerage agreement, can my buyer and I amend the buyer brokerage agreement to increase my compensation to match the cooperative compensation offer? I heard that NAR lawyers said you can never amend the compensation amount. Is that true?  

A: The practice changes that were implemented last year because of NAR’s antitrust settlement require buyer brokerage agreements to include an objectively ascertainable fee for buyer broker compensation. The fee cannot be a range or open-ended. Additionally, the practice changes prohibit a buyer broker from receiving more compensation from any source than the amount agreed upon in the buyer brokerage agreement.  

If a buyer brokerage agreement is amended solely for the purpose of increasing compensation, this could appear to be a workaround to the practice changes. However, there may be legitimate reasons to increase buyer broker compensation via an amendment.  

Before executing an amendment to increase buyer broker compensation, you should have a comprehensive discussion with your client and good faith negotiations. A unilateral amendment steering the client to increase compensation just to match an offer from the listing firm or seller would be problematic and a likely violation of the settlement agreement. NAR does not prohibit amendments, but they do point out that the best practice would be to accompany any increase in compensation with an increase in your services.  

Have a question about this article? Submit it to the Legal Hotline!

The Legal Hotline is a member benefit that has been supporting members for over 25 years. Our team of lawyers answers your important questions about real estate transactions quickly and accurately (usually within three business hours!).

Here are some tips to help make the Legal Hotline work for you!