MRED Blog

REinventing MLS

Commission policy updates coming to connectMLS

Important

You want your commission amounts to be more definite. We heard you and we’re making it happen!

Starting June 4th, 2018, Net Sale Price will be more clearly defined. For residential and commercial sales, the Net Sale Price will be the Gross Sale Price minus amounts to be credited or paid to the buyer as reflected in the initial contract.NetSalePriceField

This update mainly affects transactions where commission is influenced by concessions or other changes that were not a part of the initial contract. The rule modification is designed to protect broker commissions from last-minute concessions often introduced by attorneys and other third parties. It also honors the differences between commercial and residential transactions, allowing flexibility for the intricacies of those deals.

The option to pay on Gross Sale Price or a flat dollar amount is still available. Properties currently listed in connectMLS do not require any changes, i.e. listings already in the system are “grandfathered” in and will not be required to comply.

For rentals, the Net Rented Price will be defined as the Gross Rented Price minus amounts to be credited or paid to the tenant as disclosed in the agent remarks and/or compensation field on the listing. For commercial lease properties, net compensation may be paid on negotiated variables as indicated in the compensation/commission agreement.

These clarifications ensure all parties involved in a transaction know what they will be compensated. MRED does not influence commission payments in any way, so please refer to the FAQs on this topic below or contact your managing broker for questions on your office’s best compensation practices.

Still have questions? Check out these FAQs.

We’re always ready to help. You can contact MRED’s Help Desk at 630-955-2755 or send us an email.

connectmls

16 responses to “Commission policy updates coming to connectMLS

  1. Pamela Trinco May 29, 2018 at 11:17 am

    Thank you so much for this clarification!

  2. Linda Lojo May 29, 2018 at 3:20 pm

    Thank you very much for the information and clarification of the new policy.

  3. Shena Omotola May 29, 2018 at 5:20 pm

    I’m so glad that you published this. I can’t even begin to tell you how many times, within the past year, that I’ve had to hunt money down due to a shortage or overage on our brokerage commission. It seems like a lot of people who are in charge of handling the final numbers get confused on how to calculate gross vs net especially when there are buyer and or seller credits involved. Hopefully, these changes will minimize those issues. Great job!

  4. Maura Murphy May 30, 2018 at 12:13 am

    AMEN

  5. Maria Kujawa June 4, 2018 at 11:10 am

    Thank you for the clear concise explanation.

  6. Dean Gutierrez December 12, 2018 at 12:35 pm

    What happens if you are at closing, (representing the Buyer) and a listing brokerage doesn’t follow the new rule and still wants to make the Net Pay based off of any initial closing credits shown on the initial sales contract and adding additional closing credits added during the attorney review period?

  7. Lori Cromie June 12, 2019 at 11:32 am

    I am currently dealing with an attorney that wants me to change page 1 of the contract to reflect the closing cost credit negotiated due to inspection items. Is this even something I can do? Shouldn’t the initial contract stay the way it is and an addendum be drafted for both parties to sign and send to the lender?

    • MRED Communications June 12, 2019 at 12:58 pm

      Hi Lori, thank you for the comment. Someone will be reaching out to you to discuss this further. We’re always happy to help and we look forward to getting your question answered!

    • Anthony Cavalea June 12, 2019 at 1:49 pm

      This is why MRED shouldn’t have gotten involved in this unless they were going to fix it all the way. The new rules create more problems than they solve. What happens if you have a low appraisal? I once had one several years ago that lead to a 40k reduction. Is the coop supposed to be paid on the contract price? On a 2.5% coop that’s a $1000 difference. In instituting the rule, I do not believe that MRED considered all the possibilities and ramifications, and I for one still find the definition of “net” lacking. It still is not clear if home warranties are included, or termite, or well/septic. Furthermore, none of the board listing agreements to which I had access support it. Also, if the buyers broker brought buyers who nickel and dime and get credits so the buyer’s broker gets less coop comp, how is that unjust? I’m fact, sometimes that’s a strategy buyers and their agents use, at least with the 6.1 contract it was. In truth, net commission should include credits negotiated after the fact. It’s far less complicated that way and more fair. If you’re going to fix something then fix it, don’t make it worse.

      • MRED Communications June 13, 2019 at 8:06 am

        Hi Anthony, thank you for your insights on this matter; we greatly value the feedback. We’ve passed along your comment to management and someone will be reaching out to discuss with you further. Thanks again!

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