The following excerpt, directly from the Metropolitan Regional Information Systems, Inc. web site clearly defines the terms of the above referenced types of listings.
Listing agents are putting themselves at grave financial risk by "offering" any type of compensation other than EXACTLY what they are in a position to offer. Numerous listings use the following terms: (cut directly from MRIS listings)
Commision pd on Net Sales Price (this one offers 3%)
Any reduction in commission will be split equally (this one offers 2.5%)
Commission is paid on net to seller ie sales price less any buyers closing cost paid by seller on behalf of buyer equals net. (this one offers 2.5%)
COMMISSIONS SUBJECT TO SELLER'S LENDER APPROVAL (this one offers 2.5%)
Set by third party approval to be split 50/50 between Buy. Broker & List. Broker (this one offers 2.5%)
And, perhaps the worst of all this one offers..."var"
Here is the EXACT wording from MRIS that governs the offering of compensation.
Can the amount of compensation owed to cooperating brokers in a Potential Short Sale be changed?
The offer of compensation indicated in MRIS in the compensation field is unconditional. MRIS's policy is that language in the Remarks field or any other field does not trump what is indicated in the Compensation field. Compensation may only be displayed as a percentage of the gross sales price or a specific dollar amount.
The selling broker is not precluded from electing to accept compensation other than as stated in the compensation fields. However, that issue is one to be negotiated directly among the brokers to the prospective sale.
To whom should I complain if the amount of compensation paid at settlement is not what was stated as unconditional compensation on the listing?
Issues regarding the amount of compensation paid at settlement are always referred to an Arbitration Board. Short Sales are not an exception.
Your local REALTOR® Association handles arbitration requests. MRIS does not arbitrate or adjudicate compensation disputes.
UNDER THE RULES AS LISTED BY MRIS AND AGREED TO BY ALL OF ITS MEMBERS
If, at the instruction of the bank, the listing broker reduced the compensation offered from a total of 6% (split evenly) to 5% the listing broker would receive 2% and the selling broker would still receive 3%.
To take this to the extreme...commission starts at 5% (split evenly) bank cuts it to 4% the selling agent would receive 2.5% and the listing agent would get 1.5%.
In other words, the compensation that you list in MRIS is what you will be required to pay upon settlement no matter what the banks say. The compensation may not be changed once an offer to purchase has been presented.
I look forward to a vibrant discussion on this one!
Comments(3)