What does a listing broker do with the commission according to a typical multiple listing service agreement?

In a typical multiple listing service (MLS) agreement, the listing broker agrees to share the commission with a cooperating broker who brings a buyer to the table. This collaboration is a key feature of MLS systems, as it encourages brokers to work together to complete transactions. The listing broker typically establishes a commission structure when listing a property, and part of that commission is offered as an incentive to cooperating brokers who may represent buyers.

This structure supports a competitive marketplace, allowing buyers to access more listings and providing sellers with greater exposure. The division of commission not only motivates brokers to list and sell properties but also fosters a cooperative spirit among them, leading to a more efficient real estate market.

Other options, such as keeping the entire commission or forfeiting it if the property does not sell, do not align with the collaborative nature of MLS agreements, where sharing commissions is a standard practice to ensure cooperation and better service to clients.