A Massachusetts buyer's agent, Sandra, successfully helps her client purchase a home. The seller's listing agreement provides for a 5% total commission, with 2.5% offered to the cooperating buyer's agent. Sandra's buyer client, however, has also signed a buyer agency agreement promising Sandra a 3% commission. The seller's broker pays Sandra only 2.5%. Under Massachusetts law, which of the following best describes Sandra's options?
Correct Answer
A) Sandra may collect the additional 0.5% directly from her buyer client pursuant to the buyer agency agreement
Under Massachusetts law and 254 CMR 3.00, a buyer's agent may enter into a buyer agency agreement that specifies the compensation the buyer agrees to pay. If the cooperating commission offered through MLS is less than the amount specified in the buyer agency agreement, the buyer's agent may collect the difference directly from the buyer, provided this arrangement was disclosed and agreed upon in the buyer agency agreement. The buyer agency agreement is a binding contract, and Sandra may enforce the 0.5% difference against her buyer client.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Market allocation is an illegal antitrust practice in which competing real estate brokerages agree to divide markets among themselves by geographic area, property type, or price range, thereby eliminating competition.
Price fixing is an illegal antitrust practice in which competing real estate brokerages agree to charge the same commission rates, fees, or other pricing for their services. It is a per se violation of the Sherman Antitrust Act.
Florida brokers are required to maintain transaction records and escrow records for a minimum of five years.
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