Decoupling Commissions FAQ

How is the RLS changing offers of compensation?

Starting on January 1, 2024, offers of compensation to the buyside broker must come directly from the sellers and/or owners of the Exclusive Property. Listing Brokers will no longer be permitted to make the offer of compensation to the buyside broker – even if it is on the seller’s or owner’s behalf. Additionally, Listing Brokers will no longer pay the buyside compensation.

How will this be done?

The seller’s (or owner’s) offer of compensation to the buyer’s broker should be in writing where the buyer’s broker can either accept, reject or negotiate the offer. The January 2024 version of the RLS’ Universal Co-Brokerage Agreement (“UCBA”) includes new exhibits of sample listing agreement compensation clauses that clearly convey the seller’s (or owner’s) offer of compensation to the buyside broker.

So, does this mean that I need to amend my listing agreements that go past January 1, 2024?

No, current listing agreements that are valid beyond January 1, 2024 will not need to be amended to convey the seller’s (or owner’s) offer of compensation, if any, to the buyside broker.  Those agreements will run their course.  However, any extension or renewal of these agreements after January 1, 2024, when the new rules go into effect, should convey the seller’s (or owner’s) offer of compensation, if any, to the buyside broker. 

How does this change affect how I enter my exclusives onto the RLS?

The RLS will still be the forum where the buyside compensation are displayed, and you will still be allowed to enter the buyside compensation. However, you must make sure that the buyside offer of compensation originates from your seller (or owner), not from you, your firm or any other broker.

So how will the buyers’ brokers be compensated?

Assuming there is an offer of compensation from the seller and the buyer’s broker has accepted the offer, the buyer’s broker will be directly compensated by the seller or owner of the exclusive property, which should occur at the closing as is customary in the New York City area. In cases where the seller does not offer compensation to the buyer’s broker, the buyer's broker may negotiate their potential compensation from the buyer.

Can a buyer’s broker reject the seller’s offer of compensation?

Yes, a buyer’s broker may reject the seller’s offer of compensation and negotiate with the seller, through seller’s listing broker, over the terms of compensation. The buyer’s broker may also seek to reject the compensation offer from the seller outright, and negotiate their potential compensation from the buyer.

When is this change effective?

This change will be part of the latest edition of the UCBA that will take effect on January 1, 2024.

Why is this change happening now?

The RLS is always striving to promote transparency and consumer confidence in the residential marketplace. These changes comport with Citysnap’s, the RLS’s consumer portal, prominent display of buyside compensation for each listing. The RLS also believes that “decoupling” the buyside compensation represents the future of how residential real estate is transacted, and expect other listing services to follow this lead.

Will be there any other changes in the UCBA?

Yes, the January 2024 version of the UCBA:

• allows professional and retail units within residential properties to be listed on the RLS,

• permits limited dissemination of “opted-out” exclusive properties,

• clarifies how offers “Coming Soon” properties may be communicated to the owner, and

• accounts for how electronic deposit payments may be accepted.

What are the consequences if these UCBA changes are not followed by brokers and sales agents?

RLS Participants who fail to abide by these new rules – or any other rule in the UCBA – are subject to financial penalties.

Are there any other policy changes?

RLS Participants can no longer use listings management technology systems that enable users to search listings by compensation level. This will help agents to fulfill fiduciary responsibilities to their clients by ensuring they are shown properties that meet their specifications, not properties with the highest rates of compensation.

How does this affect compensation under the UCBA?

The January 2024 version of the UCBA revises the compensation section to ensure that the offer of compensation to the buyside broker originates from the seller or owner.

Some brokers and agents have misinterpreted the UCBA to provide a standard 50/50 split for all commissions in the RLS. It does not, and never has. Rather, prior versions of the UCBA provided for a 50/50 split only in the rare occasion of “what if there is absolutely nothing in writing on what the selling agent gets, and what is offered to the buyer’s agent?” Nonetheless, this failsafe provision is eliminated from the January 2024 UCBA to ensure that the offer of compensation to the buyside broker originates from the seller or owner.