Cooperative Compensation Remains a Broker’s Choice

By Kipp Cooper, KCRAR & Heartland MLS CEO

Well, it has certainly been a week of change for our association and MLS.

I am very proud that our REALTOR® family has been able to come together and navigate through these changes in a truly professional way.

Over the past few months, your KCRAR and Heartland MLS staff has worked tirelessly with our volunteer members of the NAR settlement task force, chaired by KCRAR President Cindy Cunningham and HMLS President Amy Voltz.

The taskforce, made up of dozens of brokers and agents, focused on the required MLS policy changes, forms updates and the education of our members on how to stay in compliance with the NAR settlement agreement and mitigate any future risk.

Three of the most significant changes have been the elimination of the “unilateral offer of cooperative compensation” in the MLS, the requirement of a signed Buyer Agreement prior to touring a home and the KCRAR Exclusive Right to Sell Form.

The last one, The Exclusive Right to Sell form, is the one I would like to particularly focus on in this article because it has caused some hard feelings, confusion and anxiety for many.

The significant change in this form was the removal of splitting a listing agents fee with a buyer agent and replacing it with a check box indicating that the seller is or is not willing to compensate a broker assisting a buyer.

This change has unfortunately and regrettably given the perception that KCRAR believes that offering cooperative compensation among brokers or allowing sellers to offer concessions (including buyer agent fees) is no longer allowed or legal, which is certainly not the case.

So please let me attempt to set the record straight. Advertising and practicing cooperative compensation from broker to broker and seller to broker has always been, and remains to be, legal and completely permissible. The association has no policy against it and is in no way trying to discourage it. In fact, even in the form the question of whether the seller would be willing to offer cooperative compensation is clearly in the form.

If the seller indicates they are willing to compensate a buyer’s agent, then a separate contract, such as a real estate contract, marketing agreement or the KCRAR Seller’s Estimated Proceeds Worksheet form would be ways to memorialize the amount the seller would be willing to offer.

What most don’t fully understand is that the lawsuit and the concerns of the Department of Justice are not over a broker sharing a commission or a seller offering a concession to cover a buyer’s closing costs (including their agents fees). The issue is over that being published, facilitated and memorialized between competitors in one place like the MLS or association, creating what a jury and the Department of Justice to believe was a violation of anti-trust.

So, at the advice of our very good legal counsel, we are no longer facilitating broker to broker compensation through that form or through the MLS. Both are still perfectly legal for brokers and agents to do and advertise on their own. (They just will not be able to do it through our KCRAR Exclusive Right to Sell form or MLS system.) 

By doing so, this gives tremendous flexibility for our brokers to practice as they see fit and allows for models of cooperation and compensation brokerages haven’t even thought of yet.

Many of our brokers have, and can continue to use, their own Exclusive Listing Agreement form and that is perfectly OK. We remain a huge fan of broker choice, and we simply provide the opportunity to use our forms, your brokerages custom forms or the forms provided by your state association of REALTORS®.

I thank you as a valued member and encourage you to visit our KCRAR settlement resource page at KCRAR.com/change for updates and answers in our FAQs.

Respectfully yours,

Kipp Cooper

CEO

KCRAR & Heartland MLS