Amount of Compensation

Question:

Is a seller required to specify an amount of compensation they are willing to offer another firm when entering into a listing contract?

Answer:

No. The revised WB listing contracts allow a seller to indicate a willingness to offer compensation to another firm working with a buyer without committing to a specific amount when the property is listed.

The seller may choose to offer a specific amount of compensation, indicate a willingness to consider compensation without specifying an amount, or decline to offer compensation. Any offer of compensation is voluntary and negotiable.

If the seller does not establish a specific amount in the listing contract, the seller may still agree to pay compensation to a firm working with a buyer as part of a transaction. The compensation must be documented in the executed offer to purchase or option to purchase.

However, when a firm is working with a buyer-customer, the Seller Offer of Compensation (Buyer Customer) provision in the revised offer to purchase may be used only in response to an offer of compensation made by the seller. It remains unclear whether a general willingness to consider compensation without identifying an amount satisfies the definition of an offer of compensation in the WB-11...   ...more