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For a listing, should I use net commission or gross commission?

When entering cooperative compensation on a new MLS listing, you will have to choose whether the commission will be paid on “Net” or “Gross.”  If the commission is to be paid on “Gross,” it’s based on the sale price of the house as listed on the contract. If the commission is to be paid on “Net,” it’s based on the sale price on the contract less any seller concessions that are written into the contract.  For example, if the agreed-upon sale price of the house is $250,000 with a 2% credit from the seller to the buyer for closing costs, the commission would be based on $243,750 ($250,000 – $6,250, which is 2% of the sale price).  Kale’s policy is that all listings are paid on Net, unless you have another agreement with your seller that is notated on the Kale Exclusive Right to Sell Agreement or Kale Exclusive Agency Agreement, or an addendum to the Agreement. 


From time to time, the seller and buyer will agree upon additional credits during the A/I period.  Those additional concessions do not count in the commissionable net sale price.  MRED, LLC, which owns our MLS, has defined Net Price as “. . . the gross sale price minus amounts to be credited or paid to the buyer as reflected in the initial sales contract.”  This change was adopted in 2018 to protect brokerage commissions from being reduced by attorney concessions during the review period or at the closing table.  


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