Real Estate

Buyer Commissions In — Lockboxes Out — When NAR Votes Next Month

The trade group will weigh whether to require multiple listing services to allow agents and brokers to display buyer agent compensation, but it won’t consider change to lockbox policy.

The National Association of Realtors will consider a policy requiring multiple listing services to display buyer broker commissions on their listing sites and in the data feeds they provide to agents and brokers at its annual conference next month, but will not consider any policies related to lockboxes.

NAR’s MLS Technology and Emerging Issues Advisory Board, which is part of its Multiple Listing Issues and Policies Committee, held a meeting on Oct. 5 to discuss policies to put forward to the full MLS committee for a vote on Nov. 13 at the Realtors Conference and Expo in San Diego, California.

Last month the advisory board approved several policies the trade group will consider, including a request from real estate brokerage giant Realogy to change to a rule regarding listing broker attribution as well as rules regarding buyer agents touting their services as “free,” filtering listings by commission or brokerage name and broker back office feeds. The proposed policies regarding buyer agents and filtering listings by commission were inspired by a now-scuttled antitrust settlement between NAR and the U.S. Department of Justice.

The settlement would also have required NAR to repeal any rule that discourages MLSs or MLS participants from publishing or displaying to consumers compensation offered to other MLS participants and would have mandated that MLS subscribers provide information about such compensation to their clients.

In the wake of the settlement, at least 65 MLS have changed their rules to allow public display of buyer agent commissions.

Would require MLSs with listing sites, but not agents or brokers, to display buyer broker commission

NAR policy currently allows MLSs to prohibit disclosing to prospective buyers the total commissions offered to buyer brokers.

Now, NAR, which has more than 1.4 million members, will consider a proposed policy, MLS Policy Statement 8.8, that requires MLSs with public-facing websites to display the buyer broker commission and requires MLSs to include the buyer broker commission in their Internet Data Exchange (IDX) and Virtual Office Website (VOW) feeds, but does not require that the brokers and agents using the feeds display the buyer broker commission. IDX and VOW websites display a pooled set of listings from the MLS.

The proposal reads:

MLSs must include the listing broker’s offer of compensation for each active listing displayed on its consumer-facing website(s) and in MLS data feeds provided to participants and subscribers, and must permit MLS participants or subscribers to share such information though IDX and VOW displays or through any other form or format provided to clients and consumers. The information about the offer of compensation must be accompanied by a disclaimer stating that the offer is made only to participants of the MLS where the listing is filed.

According to the advisory board’s meeting minutes, the rationale for the proposal is that “[d]isclosure of the offer of compensation to buyer agents (including non-agency relationships defined by state law) will reinforce transparency for the clients and consumers working with MLS participants and subscribers in a real estate transaction.”

Any proposals approved by the MLS committee would then go to the NAR board of directors, who will meet on Nov. 15. If the board votes in favor of the policies they would go into effect Jan. 1, 2022 and MLSs would have until March 1 to implement them.

No lockbox changes for now

The NAR-DOJ settlement would also have required NAR to adopt a rule that requires all member boards and MLSs to allow any licensed real estate agent or agent of a broker, to access, with seller approval, the lockboxes of properties listed on an MLS. Discount real estate brokerage REX Real Estate, which is licensed but is not Realtor-affiliated, has been particularly vocal regarding the elimination of rules that limit lockbox access to Realtors, calling such rules “anti-consumer.”

The MLS advisory board, which has no further meetings planned before NAR’s conference, decided not put forward any lockbox-related policies this time around. Instead, the advisory board discussed establishing a new joint “Work Group” with NAR’s Professional Standards Committee “to review the ethical obligations and MLS policies, including reinforcing the duties set forth in Article 3 of the Code of Ethics, and further ensuring that all brokers have access to listed properties consistent with the sellers’ or owners’ authorization,” the meeting minutes said.

NAR work groups are typically composed of a subset of committee members who study an issue in depth and may propose related changes. Article 3 of the Realtor Code of Ethics requires Realtors to cooperate with other brokers except when cooperation is not in their client’s best interest.

Mantill Williams

“Please note that the discussion referenced was about ensuring that all brokers have access to properties, not specifically lockbox access,” NAR spokesperson Mantill Williams told Inman via email. “If a Work Group is formed, we anticipate that its purpose will be determined later this year or in early 2022, and that it will consist of representatives of the Multiple Listing Service Policy Committee and the Professional Standards Committee.”

Amendments to proposed policies

The advisory board also voted to slightly amend two of the proposals that will go before the full MLS committee in November. The policy proposal for a single MLS data feed now reads (underlining indicates additions):

Policy Statement 8.6: That MLSs must offer a Participant, or their designee, a single data feed in accordance with the Participant’s licensed authorized uses.

And the policy proposal for a broker back office feed now reads:

Participants are entitled to use, and MLSs must provide to Participants a Brokerage Back Office Feed per the Data, Use and Terms established below:

“Data” means all real property listing and roster information in the MLS database, including all listings of all statuses available to all Participants in the MLS, but excludes (I) MLS only fields
(those fields only visible to MLS staff and the listing Participant), and (ii) fields and content to which the MLS does not have a sufficient license for use in the Brokerage Back Office Feed.

The latter change “further defines and explains the listing information that is to be available as part of the Brokerage Back Office Feed,” the advisory board said.

Email Andrea V. Brambila.

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