Refusal to Cooperate & Compensate Per Direction From Client

Q: I am taking a listing on a house and will place it with our local MLS. However, the seller has had some trouble with another brokerage firm in town that participates in the  MLS and requested that we not cooperate with or compensate this particular firm. The seller doesn’t even want this other firm showing the house. Is this permissible?

A: Yes, under certain circumstances. As set forth in Article 3 of the REALTOR® Code of Ethics, REALTORS® must cooperate with other brokers except when cooperation is  not in the client’s best interest. This ethical obligation to cooperate does not include the obligation to compensate, but rather relates to a REALTOR®’s obligation to share information on listed property and to make the property available to other brokers for showing to prospective purchasers. Cooperation enhances the chance of obtaining a  sale, which is in the best interest of the client. But, there may be certain instances, such as where you have valid direction from the client, that cooperation is not in the best  interest of the client.

Therefore, while cooperation is the normal professional practice expected of REALTORS®, it is not always mandatory. So, talk to your seller about the chilling effect this  request might have on sale prospects and if the seller understands, and, importantly, the seller’s request is not calculated to deny cooperation for reasons of race, color,  religion, sex, handicap, familial status, national origin, sexual orientation, or gender identity, then you may refuse to cooperate with the other firm.

As for compensation, when you place the property with the MLS, you make a blanket offer of compensation to all other MLS Participants. NAR’s MLS policies permit a listing  broker to offer compensation to any MLS Participant other than the compensation published in the MLS, provided (i) the listing broker informs the other broker in writing in  advance of their producing an offer to purchase, (ii) the modification is not the result of any agreement among all or any other Participants in the MLS, and (iii) the  superseding offer of compensation is expressed as a percentage of the gross sales price or as a flat dollar amount. So, practically speaking, if you place this property with the MLS, you will need to give the other firm such an advance written notice that it may not act as a cooperating agent in connection with the listed property. You need not go into  detail as to why, but be prepared to show good cause. Send a copy of this letter to the MLS when the property is placed with the MLS, but refrain from making any mention of  it in the “remarks” section of the MLS data sheet or otherwise. This is a matter is between and among your seller, your firm and the other firm. Calling attention to it in the  MLS itself invites at best only unwanted and unnecessary speculation.