Per NAR, A Variable rate commission is where the commission amount paid varies depending on who is responsible for the sale. If the listing broker or their team is responsible for the sale, one commission amount is paid. However, if the sale is the result of the seller or a cooperating broker a different commission amount is paid.
The National Association of Realtors code of ethics standard of practice 3-4 states that REALTORS®, acting as listing brokers, have an affirmative obligation to disclose the existence of dual or variable rate
commission arrangements (i.e., listings where one amount of commission is payable if the listing broker’s firm is the procuring cause of sale/lease and a different amount of commission is payable if the sale/lease results through the efforts of the seller/ landlord or a cooperating broker). The listing broker shall, as
soon as practical, disclose the existence of such arrangements to potential cooperating brokers and shall, in response to inquiries from cooperating brokers, disclose the differential that would result in a cooperative transaction or in a sale/lease that results through the efforts of the seller/landlord. If the cooperating broker is a buyer/tenant representative, the buyer/tenant representative must disclose such information to their client before the client makes an offer to purchase or lease. (Amended 1/02)
- Listing Agent/Brokers Must disclose the existence of a variable or dual rate, this is a requirement for Intermountain MLS.
- If asked by cooperating brokers, listing broker must disclose the differential that would result from the transaction.
- Buyer Agent/Broker Must disclose to the buyer the dual or variable commission rates before an offer is made.
Citations:
- 2023 Code of Ethics & Standards of Practice. (2021, January 1). https://www.nar.realtor. Retrieved August 18, 2023, from https://www.nar.realtor/about-nar/governing-documents/code-of-ethics/2023-code-of-ethics-standards-of-practice