Coop commission for licensed broker but non MLS/borad member

Asked by Louis, Oak Park, IL Tue Jul 23, 2013

Hello, I am an Illinois licensed attorney and real estate investor. I have recently obtained my real estate broker's license. A good friend of mine is my sponsoring broker. However, they are not a mls/board member and as such, I cannot be an mls/board member. The reason I got my license was to be able to receive coop. comp. on the buildings I buy (typically 1-2 properties a year). I do not plan on using it for anyone but myself. Is there a certain procedure I must follow to insure I am eligible for a commission in these circumstances? Do I need to enter into an agreement with the listing agent before I submit my offer? Any advice is appreciated.

thank you.

Help the community by answering this question:

+ web reference
Web reference:

Answers

10
Alvin Dobbs, Agent, Waukegan, IL
Tue Jul 23, 2013
BEST ANSWER
Hello,
What you will need is an agreement between your broker and the listing broker. Basically, you are just agreeing you will accept the co-op commissions. Make sure the listing managing broker signs. Do and get this prior to submission of the offer.

It helps that you are the principle to the contract. You or your broker can ask directly for a copy of the list flyer. The listing broker is required to send it to you.This will tell you what the current commissions are. The list broker is also required to tell you prior to the offer if there is to be any changes to the co-op-commissions. Again, with you being principle; you can maybe even suggest some changes to the commissions.

You should have no issues of having to board the other side. You make no deal if you do not get the commissions of at least the co-op. You unlike many others are not required to go to the board because of a commission dispute. You can file your dispute in court. Only Realtors are required to board commissions. You hold a license but you are not a Realtor so the required arbitration does not apply to you. This is a biggie. It puts you into a much more powerful position than if you go to arbitration.Note--the purchase and sales (contract) agreement may have an arbitration clause. Stopping here because this is slowly moving past the scope of your question.
ADD
0 votes
Manuel Brown, Agent, Chicago, IL
Tue Jul 23, 2013
Louis,

Any commissions paid have to be paid to your managing broker(your friend). As a matter of real estate law you should know your management broker is required to have an agency agreement with you that states how commissions are paid and the percentage you are to receive.

So the correct answer is all funds must be paid to your managing broker weather he is a sole proprietor ship or a corporation.

Jacqueline gave you sound advice as well.
1 vote
Yes, we have an agency agreement in place (which is very favorable to me). However, I am going to explore some alternate possibilities in terms of a managing broker. Thank you.
Flag Tue Jul 23, 2013
Jacqueline S…, Agent, Chicago, IL
Tue Jul 23, 2013
1) Call CAR and get an opinion
2) many sponsoring brokers are part of the MLS and have low fee or no fee sponsorships that charge a per transaction fee
3) since you have a license you should get your commission, however you are not part of the local MLS system so theoretically, you do not have access to even see what the breakdown of the commission is being offered and part of contract law is knowing the terms.
4) find a more favorable sponsorship to avoid having to get extra paperwork per transaction. Commission disputes get handled by the board if you are not a member of the local board, do you really have any standing?
1 vote
Also when you call CAR they have ways of holding a license for you. I am no sure if that is just to put your in holding to keep it active or if there is an option from which one can still work.
Flag Tue Jul 23, 2013
Also when you call CAR they have ways of holding a license for you. I am no sure if that is just to put your in holding to keep it active or if there is an option from which one can still work.
Flag Tue Jul 23, 2013
Thank you. On the particular building I am interested in, the listing agent provided the MLS sheet which had the coop com. break down of 2.5%. I will have an agreement signed by the listing agent if this transaction goes through but I will seek a more favorable sponsorship going forward.
Flag Tue Jul 23, 2013
Thomas Moser, Agent, East Northport, NY
Thu Jul 25, 2013
Unless you have a written agreement with the seller or the listing broker you are not entitled to a commission. If you are going to be doing this often, why not join an office that is an MLS member?
0 votes
Evelyn S. Fr…, Agent, Chicago, IL
Thu Jul 25, 2013
Yes, of course you can get paid provided you are a licensed Realtor. Simply set up a written agreement with the listing office.

This is not an unusual scenario and shouldn't be a problem

Good luck!
0 votes
Joe Schiller, Agent, Chicago, IL
Tue Jul 23, 2013
sounds like your in need of a good agent while you do your ownthing..
0 votes
Matt Laricy, Agent, Chicago, IL
Tue Jul 23, 2013
The co-op broker can only pay the fee to a company. If you have no company, then you cant get a referral fee.
0 votes
Bill J Delig…, Agent, Naperville, IL
Tue Jul 23, 2013
You should be able to get paid as long as you have a signed separate agreement by the Listing Broker. As per the future, if you do not need a lot of hand holding I would suggest Charles Rutenberg Realty. Low Annual Costs & Maximum Profits.
0 votes
David Hanna, Agent, Chicago, IL
Tue Jul 23, 2013
The simple way to do this is to have a basic written agreement form you submit along with your offers that asks the listing broker for the commission. This needs to be signed by them ( not the seller) and is not part of the real estate contract. That will take care of it.
You might want to consider other managing broker choices, some very reasonable arrangements out there for people like you. Feel free to drop me a line if you want some suggestions.
0 votes
Thank you for the response. My current managing broker runs a leasing office and does not deal with purchase transactions. Once I can self sponsor I will join a Board but perhaps in the interim a basic written agreement will suffice. Otherwise, I will look into other managing broker choices
Flag Tue Jul 23, 2013
David Hanna, Agent, Chicago, IL
Tue Jul 23, 2013
The simple way to do this is to have a basic written agreement form you submit alom
Ng with your offers that asks the listing broker for the commission. This needs to be signed by them ( not the seller) and is not part of the real estate contract. That will take care of it.
You might want to consider other managing broker choices, some very reasonable arrangements out there for people like you. Feel free to drop me a line if you want some suggestions.
0 votes
Search Advice
Search
Ask our community a question

Email me when…

Learn more