The National Association of Realtors will consider several proposed multiple listing service policies at its annual meeting in November, 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.
NAR’s MLS Technology and Emerging Issues Advisory Board, which is part of its Multiple Listing Issues and Policies Committee, considered the proposals Sept. 9 and 10 and the trade group announced Wednesday they would move forward to the full MLS committee for a vote on Nov. 13 at the Realtors Conference and Expo in San Diego, California.
If approved, the proposals 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.
“The advisory board moved forward with these recommendations because we think they ensure that MLSs are up-to-date with advancements in technology and consumer preference, operate with transparency, and maintain policies that make the consumer experience better,” said Greg Zadel, chair of the advisory board, in a statement.
He added that the proposed policies would serve consumer interests and reinforce existing NAR policies and the Realtor Code of Ethics.
Here’s a rundown of the proposed policies, per the NAR website:
A ban on advertising services as “free”
“That the following be adopted as MLS Policy Statement 8.4:
Policy Statement 8.4: MLS Participants and Subscribers must not represent that their services as an agent or representative to a buyer or seller in a real estate transaction are free or available at no cost to their clients.”
This policy recommendation relates directly to a now-scuttled settlement between NAR and the U.S. Department of Justice, advisory board member and MLS CEO Brad Bjelke told attendees at the Council of MLSs’ annual conference Tuesday. That settlement would have required NAR to repeal any rule, and required all member boards and MLSs to repeal any rule, that permits all MLSs and MLS participants, including buyer brokers, to represent that their services are free or available at no cost to their clients.
“While Realtors have always been required to advertise their services accurately and truthfully, and many Realtor services have no cost to the recipient, this change creates a bright line rule on the use of the word ‘free’ that is easy to follow and enforce,” the advisory board said.
“These benefits outweigh the fact that this bright line may result in Realtors being unable to use the word ‘free’ for some services they provide at no cost to the recipient.”
A ban on filtering listings based on offers of compensation or brokerage or agent name
The board’s proposal reads: “That a new MLS Policy Statement 8.5 be adopted and the IDX and VOW policies and model rules be amended, as provided below.
Policy Statement 8.5: MLS Participants and Subscribers must not, and MLSs must not enable the ability to, filter or restrict MLS listings that are searchable by and displayed to consumers based on the level of compensation offered to the cooperating broker or the name of a brokerage or agent.”
The policies for Internet Data Exchange (IDX) and Virtual Office Websites (VOWs), which are pooled MLS listing feeds that agents and brokers can use to display listings on their websites, would change to prohibit brokers from choosing to not display listings based on the compensation offered to buyer brokers from listing brokers or on the level of service provided by a listing firm or on whether the listing broker is a Realtor.
This proposal also directly relates to the NAR-DOJ settlement. The deal would have required NAR to adopt a rule that prohibits MLS participants from filtering or restricting MLS listings that are searchable by or displayed to consumers based on the level of compensation offered to the buyer broker or the name of the brokerage or agent, and repeal any rule that permits or enables such filtering.
“These changes reflect the recent developments in real estate brokerage services, evolving broker business models, and how online marketing and searching of listings have evolved,” the advisory board said.
A single MLS data feed
At the CMLS conference, MoxiWorks CEO York Baur highlighted a problem he has as a software provider to more than 800 brokerages with a 400,000 agents combined. “To service the 450 MLS relationships that we have, we have to operate over 4,000 feeds,” he said. “That’s just broken and difficult.”
One of the policies proposed may ameliorate that problem. The MLS advisory board recommended “That the following Policy Statement be adopted:
Policy Statement 8.6: MLSs must offer a Participant, or their designee, a single data feed in accordance with a Participant’s licensed authorized use.”
MLS advisory board member Sam DeBord, who is also CEO of the Real Estate Standard Organization (RESO), wrote a blog post describing how MLSs will often allow brokers and their vendors to use different subsets of MLS data and then require different processes to access each subset.
“Brokers are sometimes asked to get website data via Web API, customer data via RETS, and back office data via FTP,” DeBord wrote. “Even when the data transport method is consistent, there are separate access credentials for different rings of data.
“‘One Feed to Rule Them All’ would create default access to a complete broker data set with one set of access credentials, and the brokerage community is fervently pushing to make this a reality across all MLSs.”
A broker back office feed
The advisory board recommended a policy that would entitle brokers to an MLS data feed that they, their agents and their designated vendors could use for internal purposes.
The proposal reads in part: “That the following Policy Statement be adopted:
Statement 8.7: Brokerage Back Office Feed
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 Participants, but excludes (I) MLS only fields (those fields only visible to MLS staff and the listing Participant), and (ii) fields and content to which MLS does not have a sufficient license for use in the Brokerage Back Office Feed.
“Use” – The Brokerage Back Office Feed Data may only be used by the Participant, Subscribers affiliated with the Participant, and their designees for the following purposes:
- Brokerage management systems.
- Customer relationship management (CRM), and transaction management tools.
- Agent and brokerage productivity and ranking tools, and reports.
- Marketplace statistical analysis and reports in conformance with NAR MLS Policy Statement 7.80, which allows for certain public distribution.
There is no option for Participants to opt-out their listings from the Brokerage Back Office Feed Use as defined.”
CMLS, which put forward the proposal, called it the Administrative Data Service (ADS) policy, but the MLS advisory board changed the name to the Broker Back Office policy, according to Bjelke.
“Today’s brokerage community utilizes many productivity tools, and proprietary reports and resources that call for enhanced access to and use of MLS data,” the advisory board said. “This new Policy Statement will empower Participants with the information they need to better serve their clients and customers.”
Listing broker attribution
The advisory board approved a policy proposal from Realogy that would require that the contact information for listing agents and brokers be displayed on website listing pages at least as prominently as that of any advertising agent on a site — though with some modification.
Realogy’s proposal would have required that “The contact information for the listing agent must be clearly identified and displayed at least as prominently as any other contact information or lead form on the site clear so that a reasonable real estate consumer understands who the listing firm is and how to contact them.” The advisory board’s recommendation omits the “reasonable real estate consumer” language.
Instead, IDX and VOW policies would be amended to add the following underlined language:
Internet Data Exchange (IDX) Policy, Policy Statement 7.58
Policies Applicable to Participants’ IDX Websites and Displays
12. An MLS Participant’s IDX display must identify the listing firm and contact information in a reasonably prominent location and in a readily visible color and typeface not smaller than the median used in the display of listing data. The contact information for the listing firm must be clearly identified and displayed at least as prominently as any other contact information or lead form on the site.
IV. Requirements that MLSs May Impose on the Operation of VOWs and Participants, Policy Statement 7.91.
d. Any listing displayed on a VOW shall identify the name of the listing firm and contact information in a readily visible color, and reasonably prominent location, and in typeface not smaller than the median typeface used in the display of listing data. The contact information for the listing firm must be clearly identified and displayed at least as prominently as any other contact information or lead form on the site.
“Listing broker attribution with contact information could provide a more accurate representation to the public about the listing, and improve the public’s ability to seek additional property details,” the advisory board said.
MLS best practices on rule violations, real estate standards, data feeds
The advisory board’s list of recommendations included proposals from the MLS committee’s MLS Standards Work Group that would not have to be approved by the NAR board because they would not be mandates. If approved by the MLS committee, the following six guidelines would be added to NAR’s MLS Best Practices:
1. Best Practice: MLSs should issue discipline for violations of local MLS rules consistent with the guidance provided in Part Two, F, Enforcement of Rules, found in the NAR Handbook on Multiple Listing Policy.
2. Best Practice: MLSs should post on their website written instructions for requesting MLS data feeds that are available to Participants and their vendors, including an explanation of the different feeds and the information provided in each feed. This includes contact information for administrative and technical support. The data transport method should be RESO Web API compliant.
3. Best Practice: By July 1, 2022, MLSs should create with their vendors and leadership a written plan with a timeline and cost estimate to establish a native* RESO Data Dictionary compliant MLS for all listing content available to MLS Participants and Subscribers.
“Native” means all of the MLS’s data access services for Participants, Subscribers, vendors, designees, and other authorized recipients must be delivered Data Dictionary compliant data without the need to convert it from some other format.
4. Best Practice: Where available, MLSs should share aggregated data, for statistical purposes, with their state association of REALTORS® and NAR to assist with advocacy efforts and home ownership interests.
5. Best Practice: MLSs should provide all officers and directors information about their fiduciary duty to the MLS and have them sign an agreement that confirms their understanding and commitment to those duties.
6. Best Practice: MLSs should adopt and annually review a strategic plan to address Participant and Subscriber needs with specific consideration for: 1) leadership training, 2) partnerships, 3) technology, 4) participant outreach, 5) financial independence, and 6) DEI (diversity, equity, and inclusion).
The advisory board said it expects these best practices to help MLSs “deliver a higher level of service and engagement” with their subscribers.
“Although they are not required to be followed, MLSs should consider each Best Practice to determine support for local adoption and implementation,” the board said.
Lockboxes and display of buyer broker compensation
There were a couple of rule changes in the withdrawn NAR-DOJ settlement that were not included in the policies proposed by the MLS advisory board. The settlement would 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.
The 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.
The MLS advisory board will meet again in October to discuss these and other potential policy changes, according to NAR and Zadel.