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Offers of Cooperative Compensation Related to Listings of REO

At the 2008 Midyear meeting, the National Association’s Multiple Listing Issues and Policies Committee received the March, 2008 Report and Recommendations of the MLS Cooperative Compensation Work Group. The Report addressed cooperative compensation issues related to short sales, REO, types/levels of service provided by cooperating brokers, net sales prices, and bonuses. The Report,including all of the its recommendations, was accepted by the Committee and was the basis for several policy recommendations to the Board of Directors.

With respect to compensation offers related to listings of REO property in MLS, the Committee directed that relevant information be excerpted from the Report and made available as this white paper to guide MLSs and MLS participants. Following is the relevant information:

Offers of Cooperative Compensation Related to Listings of REO

In a number of instances financial institution and government agency asset managers, when entering into listing agreements with MLS Participants, have asked to include terms in those listing contracts prohibiting listing brokers from offering or paying cooperative compensation to cooperating brokers if the successful purchaser holds a real estate license. In some instances, institutional sellers have insisted that cooperative compensation not be offered by listing brokers through MLS or paid to cooperating brokers in cases where the purchaser is related to a real estate licensee. No justification or rational was offered in support of there sellers' requests that listing brokers' offers of cooperative compensation be conditioned on buyers' possession of a professional license, or relationship to a person who holds such a license.

It is the consensus of the NAR Multiple Listing Issues and Policies Committee that any listing agreement between a seller and a listing broker that provides that cooperative compensation cannot be offered or paid to a cooperating broker if the purchaser holds a particular license or credential, engages in a particular trade or profession, or if the range of potential purchasers is otherwise arbitrarily restricted, places an unwarranted condition on listing brokers' offers of cooperative compensation and is not and should not be eligible for inclusion in MLS.