Cooperative Compensation
Definition
The practice of a listing broker sharing commission with a buyer's broker, historically offered through the MLS but now prohibited from MLS display under the 2024 NAR settlement.
Example
Previously, a listing showing "3% co-op" on MLS meant the seller would pay 3% to any buyer's agent who brought a successful buyer. Now this offer cannot appear on MLS, but the seller can agree to pay buyer agent fees during offer negotiations.
Exam Tip
The NAR settlement did NOT ban sellers from paying buyer agents — it only banned advertising this on the MLS. Sellers can still offer to pay through other channels or agree during negotiations. This distinction is critical for the exam.
Related Buyer Rep Terms
Buyer Broker Duties
The fiduciary obligations a buyer's agent owes to their client, including loyalty, obedience, disclosure, confidentiality, accounting, and reasonable care.
Buyer Representation Disclosure
A form that explains to the buyer the types of agency relationships available and the duties associated with each, required to be provided before substantive discussions begin.
Buyer Consultation
An initial meeting between a buyer and agent to discuss the buyer's needs, explain agency relationships, review representation agreements, and establish expectations for the home-buying process.
Buyer Loyalty Obligation
The duty of a buyer's agent to act solely in the buyer's best interest, avoiding any conflicts of interest and putting the buyer's needs above the agent's own financial interests.
Termination of Buyer Agency Agreement
The legal ending of a buyer representation agreement, which can occur through expiration, mutual consent, breach, or specific termination provisions outlined in the contract.
Buyer Due Diligence
The buyer's right and responsibility to investigate a property's condition, legal status, and suitability before completing a purchase, typically during a specified due diligence period.
Frequently Asked Questions
Test Your Buyer Rep Knowledge
Practice with exam-style questions to make sure you can apply Cooperative Compensation and other buyer rep concepts.