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What is Dual or Variable Rate Commissions?

By Lindsey Ruschak posted 07-28-2021 09:37

  

What is a dual or variable rate commission?

Let's break it down... when the listing broker took the listing, they and the seller agreed that if the listing broker brings the buyer without the assistance of a cooperating broker, the listing broker will reduce their commission by X%.  

Basically, the seller will pay a different commission if the property is sold by the listing broker.

The listing agent must disclose there is a dual or variable rate commission in the MLS. This is done by selecting Y/N in the Variable Commission section.
Variable Rate Commission in MLS


MLS Rules and Regulations Section 5.3 Dual or Variable Rate Commission Arrangements:
The existence of a dual or variable rate commission arrangement (i.e., one in which the seller/landlord agrees to pay a specified commission if the property is sold/leased by the listing broker without assistance and a different commission if the sale/lease results through the efforts of a cooperating broker; or one in which the seller/landlord agrees to pay a specified commission if the property is sold/leased by the listing broker either with or without the assistance of a cooperating broker and a different commission if the sale/lease results through the efforts of a seller/landlord) shall be disclosed by the listing broker by a y/n field as required by the MLS. The listing broker shall, in response to inquiries from potential cooperating brokers, disclose the differential that would result in either a cooperative transaction or, alternatively, in a sale/lease that results through the efforts of the seller/landlord. If the cooperating broker is a buyer/tenant representative, the buyer/tenant representative must disclose such information to their client before the client makes an offer to purchase or lease.

Code of Ethics Article 3 Standard of Practice 3-4
REALTORS®, acting as listing brokers, have an affirmative obligation to disclose the existence of dual or variable rate commission arrangements (i.e., listings where one amount of commission is payable if the listing broker’s firm is the procuring cause of sale/lease and a different amount of commission is payable if the sale/lease results through the efforts of the seller/landlord or a cooperating broker). The listing broker shall, as soon as practical, disclose the existence of such arrangements to potential cooperating brokers and shall, in response to inquiries from cooperating brokers, disclose the differential that would result in a cooperative transaction or in a sale/lease that results through the efforts of the seller/landlord. If the cooperating broker is a buyer/tenant representative, the buyer/tenant representative must disclose such information to their client

To learn more about variable rate commissions read this Florida Realtors article.

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