Compensation of REALTOR® Who is Not Member of the Same MLS or Board

Q: I am a REALTOR® in Anytown, NC and belong to the Anytown Association of REALTORS® and participate in its MLS. I have a friend who lives in Anothertown, NC and  she wants me to act as her buyer’s agent and help her buy a house there. She’s got one in mind already and she gave me the listing agent’s number from the sign. I called  the listing agent and she said she won’t co-broke the deal with me since I’m from out of town and not a member of her Board, but would be happy to pay me a referral fee. I  thought that REALTORS® had an obligation to cooperate with other REALTORS®, no matter where they are in NC. Isn’t that true?

A: Yes, 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. However, don’t confuse an obligation to cooperate with an obligation to compensate. The 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  (see Standard of Practice 3-10). Obligations to compensate result from MLS offers or other arrangements between the listing and selling brokers prior to the time the selling  broker produces an offer. So, if by “she won’t co-broke the deal with me,” you mean that the listing broker will let you show the property and try to sell it, but she won’t pay you either at all or the same amount she’ll pay buyer agents who participate in the local MLS, then that’s not a refusal to cooperate, it’s a refusal to compensate. Granted, it might  not be the smartest decision on the listing broker’s part, as your buyer might not want to consider the property if he or she has to pay you out of pocket for your services as a  buyer’s agent, and you might even contend that the listing broker is not working in the seller’s best interest here by chilling potential offers. Still and all, it’s not a refusal to  “cooperate” as contemplated by Article 3 of the Code. On the other hand, if you mean that the listing broker won’t so much as let you show the property and wants you to  refer the buyer out to her firm simply because you are from another town and are not a member of the local Board, then that is a refusal to cooperate and I think in that case,  the listing broker’s going to have a hard time showing that her refusal to cooperate on that basis alone is in the best interest of her client. Some would argue that you don’t  know the market there and so it’s not in a seller’s best interest to work with you. If the seller makes that decision and directs his or her agent accordingly, okay. But if the  listing broker draws that conclusion on his or her own, he or she should be prepared to meet the burden of proof under Article 3 of the Code.