A top hotline under the new MLS rules is the compensation agreement and how a BB can get paid under the SCR120 Compensation Agreement.

SCR120 is the current SCR compensation agreement.

Definitions for this article:

BB = Buyer Brokerage
(agency/client or non-agency/customer/transaction-brokerage)

B = Buyer
*The Buyer paying their BB (e.g., SCR130/135/136/138) is the simplest and easiest procedure.
However, this procedure is not always the ideal procedure for a variety of reasons.
(agency/client or non-agency/customer/transaction-brokerage)

LB = Listing Brokerage(agency/client or non-agency/customer/transaction-brokerage)

LS = Listed Seller
(agency/client or non-agency/customer/transaction-brokerage)

FSBO S = Unlisted Seller For Sale By Owner
(non-agency/customer/transaction-brokerage)

Under the new MLS rules:

BB’s are going to see various LB business models.

LB’s are going to see various BB business models.

Some business models line up with your business model and some do not line up with your business model in regards to how compensation gets paid to the BB brokerage and from who in the above situations and in some variations of the below.

LB pays BB
LS pays BB

B pays BB

FSBO S pays BB

Everyone should consider being flexible, communicating between brokerages, giving each other licensees patience/grace, and involving the BICs when the associated licensees cannot resolve the issues.

SCR120 can pay the (Buyer Brokerage) from:

The Listing Brokerage (LB)
or
The Listed Seller (LS)
or
The Unlisted FSBO Seller (FSBO S)

Expect that in the near future, the SCR120 may become three different forms to make each situation more clear than the current SCR120 which was rarely used in the past and serves multiple functions:

Future SCR120 LB pays BB
Future SCR120 LS pays BB
Future SCR120 FSBO S pays BB

Currently, the SCR120 which has a lot of blanks and checkboxes is confusing to members based on reports from the hotline calls.

[The current SCR120 has a lot of blanks and checkboxes so this one form can be used in multiple situations.  In the past members asked SCR to keep the number of forms lower.  Having a utility form like SCR120 for multiple uses helped hold the number of forms down.  However, with 30,000 licensees with varying training, the hotline is hearing about SCR120 confusion.   So, the current solution is perhaps to make SCR120 into three forms in the near future.]

Current top hotlines on SCR120:

SCR120 is a Swiss Army Knife that helps in many circumstances.

However, post settlement, SCR120 is used many more times and the hotline is hearing that the checkboxes and filling in the names confuses people.

There are arguments about who signs.
Paying party signs.
Party getting the money signs.

Since the "Party Getting Money" usually signs the SCR120 first to create the offered SCR120 to the LB or LS, oftentimes the Money Receiver (Buyer Brokerage’s BIC or associated licensee) signs on the first line. A prudent practice is to describe the signature person’s role (e.g., BB BIC, BB Associated Licensee) and to print your name, especially if the signature is illegible. Use one or more lines for this.

Since the "Paying Party" usually signs the SCR120 second to create the agreed upon SCR120 compensation agreement between the BB and the LB or LS, oftentimes the the Money Sender (LB BIC or associated licensee, LS) signs on the next available line. A prudent practice is to describe the signature person’s role (e.g., LB BIC, LB Assoicated Licensee, LS) and to print your name, especially if the signature is illegible. Use one or more lines for this.

Although complex, there can be multiple SCR120’s and multiple Paying Parties in a deal. Call the hotline.

A Paying Party (e.g., LB, LS) should always be cautious about signing multiple SCR120’s, especially for the same buyer on the same property. Call the hotline.

There are arguments about how to notify the buyers and the sellers of the SCR120 payment.
One solution is to email copies to the buyers and sellers asap.
Also notify the closing attorneys in this manner too and do this asap so the closing attorneys can put the payment into the proper closing documents.

There are arguments about which SCR120 lines to sign.
Paying party signs.
Party getting paid signs.
If the BB is getting paid, then the Buyer Brokerage can sign on one line.

If the LB is paying, then the Listing Brokerage can sign on one line.

If there are two sellers signing as the "Paying Party," then the two sellers can sign on two lines.

If you need more than the four lines in SCR120, use SCR390 as an addendum to SCR120 in order to gain more signature or other lines (e.g., you have 5 sellers paying the BB using SCR120). You can do this with SCR390 and any SCR forms needing extra signature lines.

There are arguments about who can sign the SCR120 for the brokerage.
The LB BIC can sign or delegate authority to sign for the LB to their associated licensee.
The BB BIC can sign or delegate authority to sign for the BB to their associated licensee.

SCR120: Tips:

Section 1: Only fill in the Paying Party Name(s) with the proper checkbox and the Party Getting Paid name in the sentence below the three checkboxes lines.

Do not write the seller name or buyer name into Section 1 unless the seller is paying or the buyer is paying. It will be rare to put the buyer’s name here.

Do not write the LB here if the LS is paying.

Do not write the LS here if the LB is paying.

Best to use different SCR120s when there are different paying parties. This situation is likely rare.

Section 2: Fill in the buyer’s name. Checkbox Buying.

The other checkboxes/lines, call the hotline for more tailoring in other situations.

Section 3. Describe the Property being Bought in these lines.

Section 4. Use a long enough Term (e.g., write a SCR120 expiration date several weeks after the closing date).

Section 5. Write in the Compensation as a percentage of the gross sales price or a flat dollar amount to be paid.

The other blanks are for more tailored compensation and call the hotline for these parts.

Checkbox Closing.

The other checkboxes are for more tailoring in other situations, again call the hotline.

Hotline: info 803-712-3478 or 803-772-5206

This information is only accurate as of 08/26/24. You must contact SCR for updates and changes to this information after 08/26/24 as laws and regulations may change over time. SCR 803-772-5206 or email info at screaltors.org or email byron at screaltors.org)

This information is not legal advice. This information is intended only to provide general information and may not be relied upon as specific legal guidance. Legal counsel should always be consulted before acting in reliance on this information.