Massachusetts laws and regulations are silent as to the timing payment is due to a cooperating broker, but it has been discussed and debated locally.  As some brokers have noted, when there aren’t enough funds in escrow, some brokerages chose to wait until funds clear from the bank before issuing a co-broke commission check. Most checks take two-three business days to clear, but could be longer based on the amount of the check, listing brokerage’s relationship with the bank, or if it’s not a regular deposit. If you believe a check will take longer to clear (not from a local attorney, for example), then you should work with the buyer’s broker to make arrangements for prompt payment.  Please note that for MLS transactions, the rules state that compensation is due to a cooperating broker who was the procuring cause of the transaction.  Brokers can file an arbitration request anytime if there is a failure to compensate a cooperating broker in a timely manner.

While it is not uncommon for commission checks to be provided at closing, this should only be done with the understanding that the funds will not be deposited until the property is on record and the funds have cleared. A listing broker may also choose to wait until the property is recorded and funds have cleared prior to issuing any payments. In this later situation, the listing broker should take care to issue payment as soon as possible.

Cooperating commissions may be paid from either the escrow account or the brokerage’s operating account, however, no funds may be transferred from the escrow account prior to the transaction closing. As with any monies flowing into or out of the escrow account, all funds must be properly accounted for.