Ethics Exchange
A bi-weekly column by the
Greater Milwaukee Association of REALTORS®
Do you have a question or topic related to REALTOR® ethics that you would like addressed in a future issue of Ethics Exchange? Click here to e-mail Scott Bush at the GMAR.
In Wisconsin, Commissions Must Be Paid to the Brokerage, Not the Agent
The GMAR has received several reports of listing brokerages directing settlement agents to pay their agents directly, along with cooperating brokers, and not their respective brokerages.

The GMAR does not enforce state law. However, if you are engaging in this practice, or if you are a closing service provider, it may be prudent to discuss this matter with your legal counsel and review Wisconsin Statute 452.19 (2):
 
452.19 Fees and commissions.
 (2) If a licensee is associated with a firm, all fees or commissions and any part thereof for performing any act specified in this chapter and all compensation for a referral or as a finder's fee shall be paid to the firm.
I Showed Those Buyers All Those Homes and No Commission?
By Scott Bush
Disputes over entitlement to a co-broke commission happen in our industry. Article 17 of the Code of Ethics requires REALTORS® to arbitrate contractual disputes arising out of real estate transactions.

Once you file for arbitration, the first step in the process is a review of your request by a Grievance Review Panel. This panel will not decide if your claim should go forward to an arbitration hearing based on how strong a case they believe you have, or don’t have; that is ultimately the job of the Arbitration Hearing Panel after a review of all the evidence. The Grievance Review Panel will determine whether a claim falls within the rules for an arbitrable issue, promulgated by the National Association of REALTORS®.  

In preparing a request for arbitration, you have the right to include all evidence and information you believe is relevant to support your claim. However, make sure your submittal explains why you believe you “made the sale happen.” It is not recommended that you base a claim on perceived predeterminants such as you had a buyer agency agreement with the buyers, and therefore believe you should get paid. Buyer agency agreement is not determinant of procuring cause. The offer of compensation, usually through MLS, is the contract for which the listing broker pays MLS participants, based on procuring cause.

Another tip is not to base a claim solely on how many properties you had shown the buyers. You may have shown the buyers 20 properties. However, if you didn’t sell them that 21st property, and you were not involved, you may not get paid. In other words, the contract (offer of compensation in the MLS made by the listing broker) is specific to the property. The listing broker may not care that you had shown buyers many other properties. The listing broker will determine if your efforts sold their listing.

For more information on procuring cause, please view the link below to NAR's Procuring Cause Guidelines, or contact me at the GMAR office (414/778-4929 or [email protected]).

We hope you enjoyed Issue #2 of Ethics Exchange 2022 brought to you by the Greater Milwaukee Association of REALTORS® (GMAR). The GMAR created this newsletter, each issue dedicated to a unique issue, because the REALTOR® Code of Ethics, on which our industry is built, is the foundation of what it means to be a REALTOR®.
Your proactive support of the Code of Ethics will assure your fellow REALTORS®, as well as members of the public, that every member of GMAR operates under the highest ethical standards.
Questions, comments or concerns regarding this issue can be directed to
Scott Bush at the GMAR Office (414-778-4929 or [email protected]).