A cooperating commission is the portion of commission a listing brokerage agrees to pay a buyer’s brokerage for procuring the buyer, and since TRESA it is typically documented through a remuneration clause inside the Agreement of Purchase and Sale rather than a standalone MLS offer of compensation.
RECO’s remuneration-clause bulletin describes exactly why the language shifted: it lets a seller agree to compensate a buyer directly for the buyer’s brokerage fees inside the APS itself, “since the old MLS cooperating-commission offer structure changed.” The clause must name the parties, state the purpose, fix an amount plus applicable taxes — confirming HST is charged on top, set a timing (typically closing), and identify who pays whom. A bare remuneration clause is not a substitute for a proper representation agreement: RECO states brokerages “are prohibited from entering into an agreement with a buyer or seller for the purpose of trading in real estate unless the agreement includes the provision of representation.”
The structural rule sits in the financial-benefits bulletin: “an agent is prohibited from receiving payment directly from any source other than the brokerage where they are employed.” A buyer’s agent cannot be paid the cooperating commission personally, even informally — the money must reach the brokerage first, which then pays the agent under whatever split their own arrangement sets.
Converting a self-represented seller into a paying client mid-transaction through a remuneration arrangement carries its own trap: it requires full multiple-representation disclosure and written consent, and the agent bears the burden of proving the arrangement served the buyer’s best interests if it is ever challenged.
A seller’s APS includes a remuneration clause agreeing to pay the buyer’s brokerage $15,000 plus HST on closing. The buyer’s agent who found the property is employed by that brokerage under a 70/30 split. On closing, the full $15,000 plus HST is paid to the buyer’s brokerage — never to the agent directly — and the brokerage then pays the agent their 70% share as a separate, internal transaction.
See also: commission trust agreement, referral fee and gross commission income.
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