Offers of compensation in the MLS are unconditional. PERIOD. The only exception that has ever been permitted is that in the instance of a short sale and in that instance advance substantive disclosure of the terms and conditions of potential changes is required. The simple "subject to lender approval" is not sufficient and may cause the listing broker liability for the full offer of MLS compensation. Regard short sales, listing brokers must disclose to cooperating brokers, prior to the production of any offer, the amount of and/or the manner in which compensation may be reduced in the event the short sale lender reduces the authorized commission.
Since its' inception there have been countless instances throughout MLS across the country of listing brokers attempting to condition their offers of compensation to cooperating brokers. During the past several years a few listing brokers have attempted to condition their offers in instances in which the buyer is a real estate licensee. This simply is not permitted. Once again, all offers of compensation in the MLS are unconditional.
First, let's clear up one important common misunderstanding: there is no Florida law or administrative rule that specially requires a real estate licensee to disclose to anyone in a real estate transaction that they are a licensee. The FREC may consider a licensee's non-disclosure a violation of the Florida Administrative Code by concealing this fact if the concealment was in furtherance of some other violation such as a fraud. However, the simple non-disclosure by itself is not a violation of Florida law or the Florida Administrative Code.
REALTORS®, pursuant to the National Association of REALTORS® Code of Ethics, have a higher obligation than that required pursuant to Florida law. Pursuant to Article 4 of the Code REALTORS® must disclose their status as a REALTOR® in their intent to acquire an interest in a property or disclose their already established interest in a property that they intend to sell. Therefore, the common disclosure of "owner/buyer is a real estate licensee" is not appropriate for REALTORS®. The correct disclosure should be "owner/buyer is a REALTOR®" Such a disclosure is done pursuant to Article 4 and may be considered sufficient disclosure pursuant to any claims of concealment in violation of the Florida Administrative Code.
Now, in the instance wherein the buyer has disclosed their status as a REALTOR® can the listing broker deny compensation to the coopering broker? The answer is NO. Again, remember: all offers of compensation in the MLS are unconditional. Some listing brokers have attempted to allege that the Seller, typically a bank on REO listed properties, will not pay real estate licensees purchasing for themselves. Unfortunately, for the listing broker that is simply not correct nor permitted. The Seller does not pay the cooperating broker; the listing broker is singularly responsible for payment to the cooperating broker, not the Seller. Simply put, cooperating compensation is an offer made by the listing broker, not the Seller. This issue has been suggested and summarily dismissed by committees of the National Association of REALTORS® in years past. Why, because MLS policy is clear: all offers of MLS compensation are unconditional.
Therefore, the next time you as a REALTOR® are purchasing a MLS listed property you should know that you should proudly disclose your status as a REALTOR® and know that the MLS offer of compensation cannot be withheld by the listing broker.
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