Question: What do you call the commission paid by the listing broker to a selling broker who is not a member of the MLS?
Answer: A written agreement to compensate.
When no commission agreement is automatically in place, such as through an MLS, one cannot assume that the selling broker will be paid. Article 3 of the Code of Ethics, SOP 3-1 reads: Unless expressly indicated in offers to cooperate, coopering brokers may not assume that the offer of cooperation includes an offer of compensation. Terms of compensation, if any, shall be ascertained by cooperating brokers before beginning an effort to accept the offer of cooperation.
Question: Is a variable-rate commission one that a listing broker agrees to pay a selling broker who is not a member of our MLS?
A variable-rate commission (VRC) is negotiated between a seller and the listing broker at the listing appointment when: • one amount of commission is payable if the listing firm sells the property, and • a different amount of commission is payable if a cooperating broker sells the property. The listing broker is required to disclose that a variable rate exists in MLS as VRC? Yes and then is required to disclose the differential when asked by a selling broker. (Code of Ethics, Article 3, SOP 3-4)