A California listing broker takes an exclusive right to sell listing. Another broker representing a buyer brings the offer that puts the property under contract, and before closing the two brokers sign a written compensation agreement setting the cooperating broker's share of the listing broker's commission. If a dispute arises over that money, who is primarily responsible for paying the cooperating broker?
Correct Answer
A) The listing broker pays the cooperating broker from the commission received from the seller
Since August 2024, multiple listing services no longer carry offers of compensation to buyer brokers, so cooperating compensation has to come from a contract someone actually signed. Here the two brokers signed a written compensation agreement, which makes the listing broker the obligor: the listing broker collects the commission from the seller under the listing agreement and pays the cooperating broker's share under the broker-to-broker agreement. The cooperating broker's claim in a dispute runs against the listing broker, not against the seller, who never promised the cooperating broker anything.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An arrangement where a brokerage assigns separate agents within the firm to represent the buyer and seller in the same transaction, allowing each client to have dedicated representation.
A situation where a single agent or brokerage represents both the buyer and the seller in the same real estate transaction.
An agency relationship created by a clear, explicit agreement between the principal and agent, either orally or in writing.
More Laws Of Agency Fiduciary Duties Questions
Under California law, the agency disclosure requirements apply to which types of property?
Under California law, when must a buyer's agent give the agency disclosure form to the buyer?
A broker who fails to promptly disclose their dual agency status is subject to:
A broker’s fiduciary obligation to protect a seller’s confidential information continues:
A broker has an exclusive agency listing on a property. If the owner sells the property, the broker is entitled to:
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