Iowa Real Estate Practice Exam

Which of the following can a broker extend through the MLS?

1. Subagency

2. Referral commissions

3. Buyer agency

4. Cooperating commissions

The correct answer is: Cooperating commissions

A broker can extend cooperating commissions through the Multiple Listing Service (MLS) to incentivize other brokers or agents to bring buyers to a listed property. This practice is invaluable in real estate as it encourages collaboration among brokers and improves the chances of selling a property. By listing a property with an offer of a commission to cooperating brokers, the seller increases exposure and access to a wider pool of potential buyers. Cooperating commissions represent the percentage of the sale price that the listing broker agrees to pay to the broker who brings a buyer to the transaction. This transaction structure fosters a cooperative real estate environment where agents work together for mutual benefit. In contrast, subagency, referral commissions, and buyer agency represent different relationships and agreements in real estate that do not typically involve direct extensions through the MLS in the same manner. For instance, subagency involves a specific agency relationship with the seller that may not be expressly listed in the MLS, while referral commissions are usually negotiated directly between agents without a formal aspect in the MLS system. Buyer agency pertains to the agreement between a buyer and an agent, generally outlining the agent's obligations to the buyer rather than being a function of the MLS system.