Disclose Dual Variable Rate Commissions

Dual Variable Rate Commission.  Your MLS and the REALTOR® Code of Ethics require you to disclose when, if when listing a property where the Listing Broker is double ending the transaction, the total compensation paid by the Seller is less than if paid when there are two different agents. For example if the property is listed with our firm at 5% when there is both a Buyer’s and Seller’s agent, but 4.5% when you as Listing Agent represent both sides, this must be disclosed as a Dual Variable Rate Commission.

  • 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 before the client makes an offer to purchase or lease. (Amended 1/02)
  • Please be sure to use proper wording when stating the reduction on your listing agreement.
    • For instance, don’t say “If Listing Agent also represents Buyer, then compensation to be 4.5%.” You should say “If [Your Name] also represents Buyer, then compensation to be 4.5%.” This way, there would be no misunderstanding.
    • Because your KW Market Center is technically the “Agent,” then another Agent in your Market Center (which could be considered as “Listing Agent”) could represent a Buyer and you would have to reduce your compensation when you wouldn’t have to.
  • Be sure to disclose a Dual Variable Rate commission on your MLS property profile.
in Commissions, Compliance, Listings