So here's the question, the MLS says 10K bonus to selling agent. No conditions, no stipulations like, for full price contract, if closed by x/x/09. Just 10K bonus to selling agent. I write a PA in April, the first thing that the seller strikes is the bonus. Not really shattered because in the overall picture the offer was low but in reality, that's why we are negotiating. The deal never takes off.

A month later we are back at it, the bonus is still unchanged in the mls. I write a new offer that is 90% of asking with a quick ( three week) close. The listing agent says looks good but I know he is striking the bonus.



So my question is how does one pursue this without messing up my buyer's deal?

1. did the seller ever intend to give a bonus and if so under what conditions?

2. should we be permitted to write anything in our MLS and not have to back it up? I've known of agents who said there were ceiling fans when there weren't and had to produce them!



I know this is a broker question but I'd be really curious to hear your responses!

Without including some type of stipulation (like full price offer, closed by XXXXX date, etc.) I think you have a legitimate case for the bonus. Will be interested in hearing other opinions.

Seller doesn't have to pay broker any compensation at all unless terms of listing are met so they can pretty much change/negotiate anything unless a full price non contingency offer is written.

Sounds like they played the system to get noticed. Had you brought a full price offer in you'd likely be entitled to the bonus.

Kind of what I figured, but I'm not sure the property would even appraise at the seller's price!
What bothers me is the "pitch" This is not a luxury home! 10K come on, isn't that pretty lame anyway?
What stops anyone one from making incredulous remarks knowing they will probably never have to pay it? Ethics anyone??

Actually commission is spelled out in the broker's listing agreement and what co-op and any bonuses there are going to be.

Yes the seller would not be obligated to pay BUT the listing broker could get into trouble by the mls and also an ethics voilation(realtors only) for non-full disclosure.The MLS has santions for voilating the rules and it will not make the agents broker happy whatsoever.


If the broker doesn't police their agents it hurts the brokers image. Word will get around of these tactics and buyers brokers/agents won't want to show their buyers these listings.

Basically they are trying to suck them in without disclosing a condition. It would be better to not waste everyone's time upfront than to play these games.

I would not let it stop the deal or fight the listing agent over it. I would get the deal in escrow and then have my Broker fight over the bonus with the other broker. It does not say "seller" is offering it, it says the Broker is offering it, so it should not be part of the contract anyways.

If need be I'd even split the bonus with my broker for the time, expense, and aggrevation it would cause. Hepefully the other Broker would roll over and settle it. It would be bonus money.

I wouldn't let this mess up my deal for my buyer! I do need the documentation of the seller and lister initialing the strike from the contract don't I?
My intent is exactly what you have stated, close the deal, and save the trouble for my broker, the split idea is good. Of course half of nothing is nothing!

I had a situation with a Bonus. It was an REO property, Bonus in the MLS to selling agent (No stipulation,no conditions, if closed by XXXX date. One day before close, bank said will not pay Bonus because offer was never accepted by such XXX date. Listing agent never disclosed throughout transaction.
Went to arbitration and We WON!!!!!!!!!Listing agent Broker had to pay up .....Lesson learned......watch out what you put in the MLS,Disclose!Disclose!Disclose! Treat others as you want them to treat you. Bait and Switch>>unacceptable

"It does not say "seller" is offering it, it says the Broker is offering it, so it should not be part of the contract anyways."

see:

"I write a PA in April, the first thing that the seller strikes is the bonus."

I would think that if the seller crossed it out and initialed it as part of the counter, the seller successfully negoitiated the non payment of the bonus? Compensation should not be discussed in the purchase contract. Compensation is dealt with between seller and his broker and between the brokers via a co-op on the MLS offering.

I could be wrong though.

I think the core issue is I wouldn't allow my agents to be doing such nonsense and causing problems for my brokerage.

If they were at my brokerage they would be reprimanded and not allowed to do business this way. Honesty and integrity go a long way in this business. As a broker running a company you are in it for the long haul and alot of agents faulter real quick in the biz so they will try any tactic to make a quick buck. These are why company systems are kept in place to keep agents in line.

I agree I wouldn't make waves but as my first brokers said. "Always be nice because at the end of the day we all play in the same sandbox. That one client or customer you deal with once or twice on average but colleagues you will be around all the time."

Now that's what I want to hear! It's not really the bonus per say it's the principal. I'm sure if this were my listing my broker would be jumping up and down if he knew about it! When we make a "mistake" we need our e and o to cover it, I don't really see this as a mistake, it's more like a blatant bait and switch...Odd thing is the lister is the one who told me about the bonus I didn't even see it until she mentioned it!

oh he did strike it the first contract this is a new contract with a new date... if he strikes it this time, and initials my first thought would be to put it back in at a graduated rate, like this is a 90% offer, I could easily write in 5K, couldn't I? or just leave it alone until after the deal closes?

Ultimately it's the listing broker and the selling broker that are handling the transaction and must review it. I would get guidance before this gets too messy.

I think Compensation should not be discussed in purchase contract, for the best interest of your clients. Contract is between Buyer and Seller . I would ask your Broker.

What LV said

Commissions and bonuses are between agents/brokers, not between buyer and seller. Commissions should not be addressed in the purchase contract, only on a seperate addendum. If the MLS has a bonus with no conditions on it, then the listing broker would be responsible for paying this later. I would personally leave it alone until after you close escrow. Then go after the listing broker for the bonus. In my area, agents need to be very careful with what is entered into the MLS because it is binding between brokers.

^^ What Len just said!

Totally agree>>What Len just said!:)

to add more intrigue to this the seller is also a real estate agent.

I think alot of people responding to this are telling you what they would want to hear in this situation. If this ever went before arbitration the facts would show that you submitted an offer previously and the seller eliminated the bonus on the counter offer. So the argument is that you knew the status of the bonus situation prior to submitting a new offer.

Yes co-op compensation is between brokers but is bonus compensation? Not all that cut and dried.

No matter what happens this should teach everyone to be crystal clear about what to put in the MLS about compensation/bonuses.

Actually he never scratched the bonus, most of the April contract was verbal. He did however scratch it today!
It's not all about the bonus for me, as I said, the lister is the one who told me about the bonus.
What it is about is why an agent/brokerage could put something in the mls and not have to back it up in anyway shape or form.

^^ I would forget about the bonus, write the contract, close the deal. Being that the seller is also a RE Agent I would not address the issue until after closing.

I would have my broker pursue the case, like I said, and we could then split the proceeds less the legal cost. Im not a greedy man, I am an ethical man though and want to be treated with the same respect.

Being that the bonus is compensation and not to be addressed in the purchase contract I would still proceed and represent my client. The compensation issue will arise AFTER the deal closes and my client is satisfied.

I would though print out the MLS listings daily showing the offering of the bonus. I'm sure at some point it will go away, keep notes, detailed notes, and all Emails.

Good Luck.

"I would have my broker pursue the case, like I said, and we could then split the proceeds less the legal cost."

And where would this bonus money be coming from?

For some reason you are not getting it. Bonuses are considered as a commission (compensation). Commissions are between the listing broker and the selling broker, not between the seller and buyer. If the listing broker is offering the bonus, then the seller cannot address it with the buyer on the contract. It is not between them.

The bonus money will come from the listing broker's share of the commission. That is how commission is split up. It doesn't come directly from the seller to the buyer's broker. It comes from the listing broker to the buyer's broker. Period.

Thanks so much for the clarification on this! That makes perfect sense. I think the confusion is that when we sign a listing agreement the seller would have to offer the bonus, right? Once it appears in the mls, the brokerage is then responsible for the bonus?

Len,

It is you who is not getting it. In this instance there is no bonus paid by the seller to the listing broker... therefore there is no bonus for them to pass along.

Pretty sure that's what they're saying.

Don't know, don't care. It would be a bonus to me as an agent. If My broker said we aint pursing it, fine. Thats between my broker and his Attorney.

Very confusing first was in the MLS, then LA told her; first was scratched from contract, then haven't seen it scratched from contract in writing.

The MLS is an offer of compensation by the listing broker. If part of the compensation is a bonus, then the listing broker owes the bonus when it closes.

Doesn't matter if its paid by the seller, the listing agent, the listing broker or my old Uncle Ef. If it's in the MLS and it closes, it's owed.

Now I am not getting it? Hmmmm, sure ok. Everyone seems to agree with me on this, but we must all not get it. I will tell you what you don't understand. You don't understand that if compensation is being offered by a listing broker in the MLS, most MLS policies state that the compensation being offered must be paid from the listing broker to the buyer's broker. I don't care where it comes from. It doesn't matter. The buyer's broker would have every right to come after the listing broker for this amount of money, period.

NOW do you get it?

Len (and others). Go back and read the original post that started this whole thread. That is what we are discussing... not standard MLS regulations. This agent understood from the getgo what the story was on the bonus situation and it was made clear to them at the first offer.

MLS regulations are not law folks.. they are guidelines. Just like the code of ethics are just guidelines.

A little knowledge in this profession is a dangerous thing and not everything is cut and dried as some people here may seem to think. If I had access to every mls in the country I'm sure I could find dozens if not hundreds of improperly worded bonus offerings as well as agents who don't get an additional commission forms signed when their sellers state they'll pay a bonus. That is the reality of this business.

I get it and suggest that anyone who doesn't get it sit down with their broker-in-charge and give them ALL the facts on this particular case and get their opinion on the realities of the situation.

^^ MLS regulations and the Code of Ethics are not Law, but Realtors® are sworn to uphold the ethics. Being a member of the MLS (in my area) requires us to uphold the Ethics and follow the guidelines as well. Break the code, and the agent is subject to santions, suspension, fines, etc.

In my MLS, by virtue of entering a listing, its a contract between my broker and everyother member broker offering compensation if they bring a buyer. I would imaagine its the same with every MLS.

Exactly!

The other guy (hp) in this thread thinks that we can just offer compensation to cooperating brokers, then say "oops I was misleading you" and just get away with it. That money would come straight out of the listing broker's pocket.

I agree with what someone said earlier, I think commissions should never be mentioned in the contract period. But also unless there are specific terms about the bouns then you should be intitled to it. I see this a lot in our MLS, the way most sellers or "builders" get around it is buy offering a bonus and then it say with a reasonable offer. Well, who decideds if its reasonable... I think what most folks are saying is that if they get a straight up offer at full price they'll offer a bonus...the whole things stupid if you ask me. If you'd take a 10K loss then let my buyer realize it in the price, but law this is who I am looking out for anyway not me.

Bottomline is offer the bonus unconditionally to draw buyer agents in and price it right. If it's priced well enough and marketed correctly you won't need to offer a bonus.

We used to have builders offer bonuses all the time but you had to close by a certain date,have a full price offer,yada,yada,yada. So it was a bait and switch and rarely anyone would get the bonus. The builder straight up down the street offering a 4 percent co-op was outselling that development 3 to 1.

When you try to screw people word spreads quickly and it will bite you in the as$.It also says when you are doing bait and switch you can expect that seller or builder to try and screw you out of other things as well if they believe it is OK to use these tactics.

In a joint listing, my colleague and I just made an error by copying the previously expired listing; in the new listing the seller took out the microwave. Guess who will be buying a microwave? This was a careless mistake on our parts.
This is was really the question. We all make legitimate or careless mistakes that sometimes cost us!

Advertising a 10K bonus to the selling agent was not a careless mistake, it was a deliberate offer.

Well, in my area, this probably wouldn't happen. This is where the statement printed on the MLS would come into play that says "GLVAR DEEMS INFORMATION RELIABLE BUT NOT GUARANTEED". For example, you are talking about a microwave that is listed in the MLS. The MLS is not a contract between the buyer and seller, so the buyer cannot hold the seller liable for anything entered in the MLS. It is only a promise to compensate a broker a certain amount of money, not a promise of what comes with the property. At least this is how it is in my area. There are some agents here that try to hold the listing agent to an item printed in the MLS, but they usually fail.

a bonus on another mls sheet reads contracts received after xxx and before xxx with escrow closed on or before xxx. Download the attached coupon and submit with offer. Now that makes sense!

Good Grief, sounds like very few brokers here. Len hit the nail on the head.

I would like to see a copy of the listing agreement as it currently stands and as a broker I would tell this seller, former agent or not, that he should know any agreements between me and his broker, are between me and his broker.

His involvement is confined to the listing agreement, period. That's why commission info is always below the sellers signature line on the purchase agreement form.

The listing agent would be brought up on charges by me for unethical practices, basically fraud to induce offers, and I wouldn't let it go. After the first offer the listing agent knew what the seller's game plan was and yet he kept things as they were on the MLS and what was going to happen the next time.

I'm always happy to help agents that play games become ex-agent's, too many agents let crap go by because they don't want to make waves with other agents, but that type of agent just keeps crapping things up and we need as few as possible of them in the business.

That agent set the terms when he put it on the MLS and my office would get it even if the listing office had to pay the difference if the total commission didn't cover it all. When that agent put the co-op terms on the MLS and I accepted, he will pay off his bet, I don't like welchers.

What I would likely do is have a talk with my buyers, make an offer at $15k less, with normal commission, tell this is our final and best offer, and start showing other properties, this seller feels in control and last time I checked this was still a really good buyers market, let the seller keep his home and play games with the next buyers agent.

The deal is set to close next week. Luckily only a three week close. I haven't mentioned the bonus since the second offer ( which he scratched) I've watched the listing, the bonus is still in the MLS. Once it closes I plan on turning everything over to my broker. Of course I have already spoken to him about it but in no way did I want to put my deal in jeapardy. Even my buyer said we'll need to watch this guy every second if he won't pay the bonus he advertised for you, how do we know if he'll complete every thing we've asked him too.! Kind of a shame, the bonus was so large and something he obviously never intended to pay. It reflects poorly on our professionalism.

Hopefully your broker is on board to fight it? If not make him fight. I agree with your buyer client, keep an eye on the agent.

Every profession has bad agents. Sounds like you ar protecting Your client. Close the deal then fight like hell to get your bonus. Even if you gotta settle with the fool and get partial payment, it's bonus money. Bet he won't be making foolish offers in the future.

Please let us know the outcome of this. That little saying that goes "information deemed accurate but not guaranteed" goes both ways and may be used as an out. My take is you won't get anything but I'd be happy to be wrong.

I think it is a good way to get showings on your listings and then hopefully offers. I reccommend it to clients when we are having a hard time selling their property.

You are joking right???

I have no problem with any bonus that is legitimately offered. I just read one the other day on a property I showed. It said print the bonus coupon from the attachments. Bonus of 1000K for offer accepted contract before June 1 and closing by Aug1.
That kind of makes sense.
The bonus in this case just said 10K to selling agent.
That's a total come on and from my perspective with a 90% offer and a closing in 3 weeks, immediately scatched from the contract and yet the contract was immediately signed is a just a bunch of cr^p.
Again I can't even imagine someone being able to pay a 10K bonus on a 350K house, so it never really seemed believable but who is this guy ( also a realtor seller) to put it in the MLS and not have to back it up with anything.

Good news deal closes this week will keep you updated now it's between the brokers!

Anybody else been to mediation? I really didn't think I would be this involved....da?!!! I can see why agents don't follow thru, I thought from what my broker said that he would be pursuing arbitration with the other brokerage.

any update on this situation ?

Latest update and would love any comments that come in! Respondents refused mediation and went straight to arbitration. Has me a little uptight because they have an attorney. My first thoughts are if they have an attorney I should have one. So I called a good one.......$500 to tell me if I have a leg to stand on. At first I thought I was fighting about principles and ethics........how much can you advertise on the MLS and not have to back up? Now I see the issue is really the money. I guess it's always about the money!
Respondents don't get attorneys if they think they are being questioned about their ethics. They get attorneys because they are afraid they could owe someone big $$.

I personally think you wasted $500. Should have been your broker paying. My view (as stated at the outset) is that all factors will get taken into consideration in arbitration, not just the statement in the MLS. You'll be lucky to get something from this -- hopefully enough to cover what you paid the atty. You can always find an atty to tell you what you want to hear. Sorry, that's my view. Seen it happen before.

Thanks HP I totally get where you are coming from. Unfortunately I don't think I have any other options but to show up and hope I don't get too beat up by their attorney,or show up with one. I started something now I have to close it up!

I didn't know they were allowed to use an attorney in arbitration. Have you checked the rules?

I had an agent file a complaint with the grievance committee and she showed up with an attorney. They told the attorney to keep his mouth shut and watch the proceedings.

The other party has one and the letter was sent from cabor

My board has now decided that the arbitration is mandatory as the bonus was advertised by the broker in the MLS.

Well, we sure are interested in seeing how this pans out.

Years ago I was a Union Rep and went to many arbitrations. The employer always sent in an attorney, the union always sent in an attorney. The lawyers were never allowed to speak though, only observe.

Depending on the type of aritration though (binding or non binding) the lawyers were allowed to stop the proceedings to offer counsel.

I'm interested in the outcome of this. When is the arbitration set? I had this same thing happen to me, only it was a $1,000 bonus, so not much worth fighting about. But my buyer offered full price, and they countered scratching the bonus. Again, it wasn't enough $$ for me to fight about, so I let it go.

The date is still not set! Unbelieveable but the case has been deemed mandatory arbitration by MLS. This will be between brokers. The other brokerage was trying to delay the hearing because the seller couldn't make it in to town. The MLS said no one cares if the seller is there, he can be there of course but the matter is between the brokerages. It doesn't appear to matter that the seller scratched the bonus on the contract. The broker is the one who offered the bonus. Further in my case I wrote 2 offers on the same property. The first, seller scratched bonus,and the bonus remained in the mls and then a second time same thing.
It should NOT be the amount at all, you were offered a bonus, you wrote the contract and the contract was accepted. You get the bonus.
I think it is pitiful that we have to hire attorneys or fight for what we believed we were entitled to. Your broker should have fought for that for you $1, $500, $1000 or $10,000. No one should be permitted to advertise a bonus with no restrictions or specifications and not have to pay up!

Yep, I agree it is the principal, but it's not worth me paying (or my broker paying) legal fees to recover only $1,000, not to mention the time and headache. At $10,000, if you prevail in the arbitration, then it definately is worth your time and money. Good luck, I'll be checking back.

Quick update, after months of settling on a date for arbitration, the other broker has now called requesting to mediate instead of arbitrate. Lawyer meeting with broker and I this morning to discuss which option is best. Original filing was August 2009. The other brokerage cancelled the Dec hearing. ( which is ironic since it was set and they objected to that date originally, then cancelled with a legitimate reason the weak before, new hearing set to this month and now 3 days before the hearing they are requesting to mediate) I THINK the difference is at mediation I might get something. At arbitration it's all or nothing? but I should know later today how this works.

Arbitration was 5/28/2010...almost a year since the property was sold. I WON!!!!

what did you win? did you get actual $$ or just a decision? what was the exact finding/determination from arbitration?

The finding was to pay in 10 days in my favor. The contract was a unilateral contract between brokers 10K to the selling agent with no stipulations. I sold the property I was entitled to the bonus. of course I still have legal counsel to pay but I think it was a win in terms of bonuses that have been put in the MLS without stipulation and hopefully anyone who is entitled to receive a bonus whether it be 200, 500, or 1000 dollars will be able to get those bonus without having to go thru arbitration

I am surprised at that finding. I guess it all depends who is doing the arbitration and what factors they take into consideration. Expensive lesson all the way around.

Check was mailed to local board and distributed to our office. Unfortunate that it had to be expensive. Who would lay out 3K in legal fees to fight for a $500 bonus? I stood to lose that 3K if the board didn't rule in our favor; the defense didn't even have a signed listing agreement. How does that happen???

Kudos to my broker who believes in following rules and doing the right thing.

So... what was the end result? 10k bonus paid by listing agent/broker to your office... you spent 3k on fight... what is the bottomline?

What did your broker wind up with and what did you wind up with net after everything?

be happy to pm you the results!

They just didn't have a copy with them . . . . or the Listing in MLS was never a legitimate "Contract" with the Seller ?

If it were the latter, then they were not entitled to any Commission from the Seller at all, let alone money to pay the bonus that was promoted.

Maybe this is not "the end of the story" ?

Do I recall that you are in Minnesota ?

Char K,
First and foremost congatulations on your win. I have been following this thread and believed that you did deserve the bonus and that you would prevail in the end if you continued to persue it.

In FL we would take an issue like this to the DRE and not use a lawyer as FL law is very clear on this sort of thing.

We made a mistake once and got an offer from an agent 100 miles away on a multiple offer property which was the highest and best so his customer got it. We made the mistake of not noiticing on the offer that they had put the selling agent compensation higher than what was listed in MLS. We ended up having to pay the difference. After conversations with the agent it was clear he did it intentionally and was not going to budge.

It pleases me to no end to hear of your success. I am curious if the agent is still working for the same broker or if they got canned. Also, if the agent or brokerage are still offering this type of "Bonus".

This happy foot dance is for you!

I would also appreciate a PM about the details. (Can't ever learn too much in this business).