top of page

Cooperating Compensation Versus Seller Direct Compensation for Real Estate Commissions

Writer's picture: Shawn Patrick MoloneyShawn Patrick Moloney

Talk about how commissions will be paid with your seller whether it will be seller direct or cooperating compensation for commissions.

With the NAR settlement best practices in effect agents are all learning what is cooperating compensation versus seller direct compensation for real estate commissions. I figured I would go over what each one means. This is not going to be a legal review for which compensation is best or to use or which one the government wants us using. This is simply a guide so you the agent knows what each means and when to fill out the proper paperwork for each.


First let's talk a little about cooperating compensation. This type of compensation is when one real estate brokerage pays another brokerage directly for procuring a buyer. This method has been common in the past with most listings even listing the level of compensation on the MLS. With the NAR settlement now compensation can not be listed on the MLS. Meaning each agent needs to reach out and find out if the sellers broker is offering compensation and if not if the seller is.


This leads us to seller direct compensation. For this commission type the seller is not paying their listing broker and having them pay cooperating buyer agents. The seller themselves is paying the buyer representation directly. This method has always existed but has become more common post the NAR settlement.


While both methods offer commissions for a buyer's agent some listings may not offer any which will lead to the need to bill the buyer directly. Understanding and explaining who will pay the commission on each home is a crucial role as a buyers agent. Later in the process when writing an offer you also will need to understand who will pay. Sometimes you will need to fill out a Cooperating Compensation Agreement and other times to write it in on the Contract to purchase for seller direct compensation.

When speaking with agents to find out what type of commission their listing is offering make sure to speak kindly. We are all in this and learning together as we move forward. We are under the instructions of our sellers to offer the type of compensation if any we do. Always remember you work only for the party you represent. I hope this helps you with the next time you are trying to understand who is going to be paying your commission. The proper paperwork acts as your means to secure your paycheck.

Recent Posts

See All

Comentarios


© 2035 Real Facts on Real Estate

  • Youtube
  • Instagram
  • Facebook
bottom of page