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REAL ETHICS by Steve Stazel | December 2008 | Index of all Real Ethics columns
We don’t have to pay a co-op?
The Code of Ethics says we don’t have to pay a co-op.
Article 3 states that “REALTORS® shall cooperate with other brokers except when cooperation is not in the client’s best interest. The obligation to cooperate does not include the obligation to share commissions, fees, or to otherwise compensate another broker. REALTORS® must cooperate with other brokers regardless of whether or not compensation is offered. This ‘cooperation’ may include sharing information about listings and allowing others to show a listing.”
Please remember that “cooperation” is what you offer when you put your listing into the MLS. “Compensation” is the amount you offer to pay other broker for producing a buyer who successfully completes the transaction.
The Code does not require you to pay compensation to another broker – but MLS rules probably do require some payment. Taking cooperation a step further, an MLS is defined, in part, in NAR’s Handbook on Multiple Listing Policy as a means by which participants make offers of compensation to other MLS participants. Policy Statement 7.23 of the handbook clearly provides that “in filing a property with the multiple listing service of a Board of REALTORS®, the participant makes a blanket, unilateral offer of compensation to the indicated MLS participants and shall therefore specify on each listing filed with the service the compensation being offered by the listing broker to the other MLS participants.”
A listing filed with the MLS must specify some amount of compensation (the amount of which is wholly at the discretion of the seller and the listing broker) to other participants in the MLS. Otherwise, no contract can be formed between the participants. Yet, it’s critical to remember that cooperation and compensation are not interdependent. Brokers who choose to participate in an MLS must abide by its rules. But the Code of Ethics is clear that cooperation doesn’t require compensation.
Each month, the Aurora Outlook features RealEthics, a column by Steve Stazel devoted to explaining Code of Ethics issues for members. The comments stated in this article are those of the author and do not necessarily represent the views of the National Association of REALTORS®, the Colorado Association of REALTORS® or the Aurora Association of REALTORS®. Ultimately, a hearing panel of the Professional Standards Committee determines whether a violation of the Code of Ethics has occurred on a case-by-case basis. These comments should not serve as the foundation of any ethics complaint, arbitration request or response.
If you have an ethical concern or an issue you would like
to see addressed, please call Stazel at (303) 773-3333 or e-mail him at
stazels@msn.com. The comments of this article reflect the understanding and
opinions of the author and do not represent an official expression of policy by the National Association
of REALTORSŪ.
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