Buyer’s Agent Attempt to Change Compensation at Time of Offer

Q: I am a listing agent and placed a property in the MLS, offering certain compensation to cooperating agents. A buyer agent from another firm that participates in the MLS called me and said she wanted to show the property to her buyer, making no mention of compensation at that time. She showed the property twice to her buyer and then brought me an offer. The buyer agent attached that NCAR Form 220, Buyer Agent’s Confirmation of Agency Relationship and Offer of Compensation. She put an amount in the compensation section that was a full percent more than I am offering! I am not going to pay this buyer agent anything other than what was published in the MLS. What am I supposed to do now?

A: We cannot say this enough- Form 220 is it not a part of the contract between the seller and the buyer, period, so buyer agents should never attach it to an Offer to Purchase and Contract nor reference it therein. Code of Ethics Article 3, Standard of Practice 3-1 requires cooperating brokers to ascertain the terms of compensation before beginning efforts to accept the offer of cooperation. If the buyer agent wished to modify the compensation offered in the MLS, then the time to discuss it with the listing broker was before the buyer agent undertook to show the house to the buyer client. If the listing broker and the buyer agent agree to change the compensation listed in the MLS, then the buyer agent may submit Form 220 along with an offer to confirm (as the title indicates) their advance understanding of the terms of the offer of compensation. Do not submit Form 220 with an offer to raise the idea of changing compensation. Buyer agent’s take note- a listing broker is under no obligation to sign Form 220 before submitting the offer to the seller. Not only does Code of Ethics Article 16, Standard of Practice 16-16 prohibit REALTORS® acting as buyer agents from making the submission of an executed offer to purchase contingent on the listing broker’s agreement to modify the offer of compensation, N.C. Real Estate Commission rules require agents to immediately deliver executed offers to the parties thereto. If the seller accepts the offer, it will be enforceable against your buyer and it matters not whether the listing broker signed Form 220.