Jacqueline Beardsley

What is required of brokers when they are compensated by more than one party in a transaction?

 Written by Victoria Munson on November 7, 2025

Here is an example:

The buyer, per their buyer representation agreement, has agreed to pay their brokerage X. During the contract negotiations between the buyer and the seller, the seller agrees to pay Y to the buyer's brokerage.  For purposes of our discussion, Y is memorialized in the purchase contract between the buyer and the seller.  Under this example, the buyer's brokerage will be compensated by two parties: The seller will pay Y and the buyer will pay the difference between X and Y. The question: Is the buyer's brokerage required to provide notice and/or obtain consent from the buyer or the seller about this compensation arrangement? The answer is found in the Rael Estate License Act .

Section 10-10(d) of the Real Estate License Act states

"If in any one transaction a sponsoring broker receives compensation from both the buyer and seller, the sponsoring broker shall disclose in writing to a client the fact that the compensation is being paid by both buyer and seller or lessee and lessor."

If you are the buyer's brokerage in this example, an argument could be made that you have fulfilled the discloser and consent requirements with your buyer client because your client has signed both their buyer representation agreement and the purchase contract.  Those documents lay out the total compensation that is due to the buyer brokerage. The buyer has acknowledged that their broker's compensation will be paid by both the seller and the buyer, and the buyer has consented by signing both agreements.

The above is an excerpt from the article.

Charles Rutenberg Realty
Naperville IL

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