Listing agent demands raise antitrust and ethics risks

"Listing agents do not have authority over the internal documentation practices of a cooperating brokerage, period, end of story. This is not a policy preference, it's a legal boundary, enforced at the federal level. Let's start with NAR's own settlement guidance, which is explicit: NAR will not create rules that mandate listing agents to set compensation for buyer brokers. The settlement's two operative requirements are that a written buyer representation agreement must exist before touring homes, and that compensation cannot be advertised on the MLS."

"Neither provision gives a listing agent authority over which forms a cooperating brokerage uses internally. A listing agreement cannot fill that gap as it governs the sellerlisting broker relationship only and cannot impose any kind of documentation obligations on a competing firm that is not a party to it. But wait, there's more. The more serious dimension to our scenario is federal. 15 U.S.C. 1 of the Sherman Antitrust Act prohibits every contract or arrangement that would"

"Then came Betty's second demand: Produce your buyer agency agreement. Show me what you signed with your client. When Susan declined, Betty chided Susan, saying she hadn't been properly trained. However, what Betty the listing agent did isn't just professionally overreaching, it may constitute a violation of federal antitrust law, the NAR Code of Ethics and in many states, state license law. The truth is, Betty is the one who hadn't been properly trained."

"Before our buyer's agent we'll call her Susan could present her offer, the listing agent we'll call her Betty informed Susan she was required to sign a specific compensation agreement, that Betty preferred to use, as a condition of cooperation. Then came Betty's second demand: Produce your buyer agency agreement. Show me what you signed with your client."

A listing agent demanded that a buyer’s agent sign a specific compensation agreement as a condition of cooperation and then required production of the buyer agency agreement and proof of what was signed. Listing agents have no authority over a cooperating brokerage’s internal documentation practices. NAR settlement guidance states that NAR will not create rules requiring listing agents to set compensation for buyer brokers, and it sets requirements that a written buyer representation agreement exists before touring homes and that compensation cannot be advertised on the MLS. A listing agreement governs only the seller–listing broker relationship and cannot impose documentation obligations on a competing firm that is not a party to it. Demands that restrict or control buyer-broker compensation arrangements may raise federal antitrust concerns under the Sherman Antitrust Act.

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