Santa Cruz County, Arizona Board of REALTORS®

Section 5 - Compensation Specified on Each Listing:

The listing broker shall specify, on each listing posted with the MLS, the compensation offered to other MLS Participants for their services in the sale of such listing. Such offers are unconditional except that entitlement to compensation is determined by the cooperating broker’s performance as the procuring cause of the sale (or lease) or as otherwise provided for in this rule. The listing broker’s obligation to compensate any cooperating broker as the procuring cause of the sale (or lease) may be excused if it is determined through arbitration that, through no fault of the listing broker and in the exercise of good faith and reasonable care, it was impossible or financially unfeasible for the listing broker to collect a commission pursuant to the listing agreement. In such instances, entitlement to cooperative compensation offered through MLS would be a question to be determined by an arbitration hearing panel based on all relevant facts and circumstances including, but not limited to, why it was impossible or financially unfeasible for the listing broker to collect some or all of the commission established in the listing agreement; at what point in the transaction did the listing broker know (or should have known) that some or all of the commission established in the listing agreement might not be paid; and how promptly had the listing broker communicated to cooperating brokers that the commission established in the listing agreement might not be paid.

Section 5.1 – Unilateral Offers:

In filing a property with the MLS of a Board of REALTORS®, the Participant of SCCMLS is making blanket unilateral offers of compensation to the other MLS Participants, and shall therefore specify on each listing filed with SCCMLS, the compensation being offered to the other MLS Participants. Specifying the compensation on each listing is necessary, because the cooperating broker has the right to know what his compensation shall be prior to his endeavor to sell.

Section 5.2 – Compensation Specification:

The compensation specified on listings filed with the MLS shall appear in one of three forms. The essential and appropriate requirement by a Board MLS is that the information to be published shall clearly inform the Participants as to the compensation they will receive in cooperative transactions, unless advised otherwise by the listing broker, in writing, in advance of his producing an offer to purchase. The compensation specified on listings published by the MLS shall be shown in one of the following forms:

(1) by showing a percentage of the gross selling price

(2) by showing a definite dollar amount

(3) by showing a percentage of net price

(A) MLS’s as a matter of local discretion, allows participants to offer cooperative compensation as a percentage of the net sales price, with the net sales price defined as the gross sales price minus the following:

(1) Builder is not paying commission on Buyer's upgrades.

(2) Seller is not paying commission if paying for Buyers' concessions.

(3) An agent referral is being split by both Listing Agent and Buyer's Agent.

(4) Seller’s contingency is subject to the Lender’s approval of a Short Sale transaction.

Section 5.3 – Retaining Right:

The listing broker retains the right to determine the amount of compensation offered to other Participants (acting as subagents, Buyer agents, or in other agency or non agency capacities defined by law) which may be the same or different.

(A) This shall not preclude the listing broker from offering any MLS Participant compensation other than the compensation indicated on any listing published by the MLS, provided the listing broker informs the other broker, in writing, in advance of his producing an offer to purchase, and provided that the modification in the specified compensation is not the result of any agreement among all or any other Participants in SCCMLS. Any superseding offer of compensation must be expressed as either a percentage of the gross sales price or as a flat dollar amount.

Section 5.4 – No Rule Requiring Negotiated Commission:

The MLS shall not have a rule requiring the listing broker to disclose the amount of total negotiated commission in his listing contract, and the SCCMLS shall not publish the total negotiated commission on a listing which has been submitted to the MLS by a Participant. The MLS shall not disclose in any way the total commission negotiated between the Seller and the listing broker.

(A) The listing broker may, from time to time, adjust the compensation offered to other MLS Participants for their services with respect to any listing by advance published notice to SCCMLS so that all Participants will be advised.

(B) The MLS shall make no rule on the division of commissions between Participants and non participants. This should remain solely the responsibility of the listing broker.

(C) MLS, at their discretion, may adopt Rules and procedures enabling listing brokers to communicate to potential cooperating brokers that gross commissions established in listing contracts are subject to court approval; and that compensation payable to cooperating brokers may be reduced if the gross commission established in the listing contract is reduced by a court. In such instances, the fact that the gross commission is subject to court approval and either the potential reduction in compensation payable to cooperating brokers or the method by which the potential reduction in compensation will be calculated must be clearly communicated to potential cooperating brokers prior to the time they produce an offer that ultimately results in a successful transaction.

(D) Nothing in these MLS Rules precludes a listing Participant and a cooperating Participant, as a matter of mutual agreement, from modifying the cooperative compensation to be paid in the event of a successful transaction.

Section 5.5 – Disclosing Potential Short Sale to Participants:

MLS must give Participants the ability to disclose to other Participants any potential for a short sale. As used in these Rules, short sales are defined as a transaction where title transfers, where the sale price is insufficient to pay the total of all liens and costs of sale and where the Seller does not bring sufficient liquid assets to the closing to cure all deficiencies. MLS services may, as a matter of local discretions, require Participants to disclose potential short sales when Participants know a potential short sale. In any instance where a Participant discloses a potential short sale, they must also be permitted to communicate to other Participants how any reduction in the gross commission established in the listing contract required by the lender and cooperating Participants. All confidential disclosures and confidential information related to short sales must be communicated through dedicated fields or confidential “remarks” available only to Participants and Subscribers.

Section 5.6 - Participant as Principal:

If a Participant or any licensee (or licensed or certified appraiser) affiliated with a Participant has any ownership interest in a property, the listing of which is to be disseminated through the MLS, that person shall disclose that interest when the listing is filed with the MLS and such information shall be disseminated to all MLS Participants.

(A) Listing Subscriber is required to disclose any ownership in a property to other Subscribers by stating the following in the Property Remarks: Owner/Agent.

(B) Disclosure of any ownership in a property shall also be stated in the public viewable component Special Conditions; by noting Owner/Agent.

(C) Violation of these Rules will be subject to a penalty pursuant to Section 7.

Section 5.7 - Participant as Purchaser:

If a Participant or any licensee (including licensed and certified appraisers) affiliated with a Participant wishes to acquire an interest in property listed with another Participant, such contemplated interest shall be disclosed, in writing, to the listing broker not later than the time an offer to purchase is submitted to the listing broker.

Section 5.8 - 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 of 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 key, code, or symbol 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.

Santa Cruz County Board of REALTORS
1103 Circulo Mercado #B • Rio Rico, AZ 85648
Phone: (520)377-9613 • Fax: (520)377-9614