The board of directors of the National Association of Realtors on Monday approved several multiple listing service policy proposals, including one that requires MLS to allow brokers and agents to display buyer broker commissions.
The policy requires MLSs to display buyer broker commissions on their listing sites and to include buyer broker commissions in the data feeds they provide to agents and brokers, but does not require that the brokers and agents using the feeds display buyer broker commissions.
The board voted 521 in favor of the policy and 258 opposed at the 1.5 million-member trade group’s annual conference, the Realtors Conference & Expo, in San Diego.
“Grounded in our commitment to act in the best interests of buyers and sellers, we regularly review and update our guidance for local broker marketplaces to continue to advance efficient, equitable and transparent practices,” said outgoing NAR President Charlie Oppler in a statement.
“These latest changes more explicitly state what is already the spirit and intent of the NAR Code of Ethics and local broker marketplace guidance regarding consumer transparency and broker participation.”
Realtor-affiliated MLSs are required to comply with NAR MLS policies in order to keep their NAR-provided liability insurance coverage. The vast majority of MLSs nationwide are Realtor-affiliated.
The trade group said in a press release that displaying the compensation offered to buyer agents “bolsters transparency and Realtors’ existing duties and practices to talk with their clients about what services they provide and how they are compensated.”
Although the commission policy proposal aroused spirited debate at the Multiple Listing Issues and Policies Committee meeting on Saturday, only one NAR director commented on the policy before the vote Monday morning.
Liz Harris of WeSERV Realtors in Arizona said she had posted the proposed policy on an agent forum on Facebook and 4 out of 5 agents were “adamantly opposed.”
“NAR is here to represent the members, not to make plea deals with the Department of Justice,” she said.
In the wake of the settlement, at least 65 MLS changed their rules to allow public display of buyer agent commissions.
At the MLS committee meeting on Saturday, Charlie Lee, NAR’s senior counsel and director of legal affairs, stressed to attendees that the buyer broker commission policy was not being considered to “appease” the DOJ.
“It is rather because we believe it serves the best interests of the participants and subscribers and the way that they serve their clients and consumers,” he said.
NAR policy previously allowed MLSs to prohibit disclosing to prospective buyers the total commissions offered to buyer brokers on agent and broker Internet Data Exchange (IDX) sites and Virtual Office Websites (VOWs).
The approved policy 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.
In an emailed statement, a spokesperson for Zillow, a brokerage and Realtor member in all 50 states, told Inman, “[W]e applaud the new rule to display buyer agent commissions and intend to display this information as it becomes available for public display from MLSs in the coming months.”
Buyer agents advertising services as ‘free’
NAR’s board also passed two other DOJ-inspired policy proposals. The first prevents agents and brokers from advertising their services as free unless they will not actually receive any compensation from anyone for them. It passed with no discussion with 724 in favor and 49 opposed.
The policy reads:
MLS Participants and Subscribers must not represent that their brokerage services to a client or customer are free or available at no cost to their clients, unless the Participant or Subscriber will receive no financial compensation from any source for those services.
“While Realtors always have been required to advertise their services accurately and truthfully, this change creates a bright line rule on the use of the word ‘free’ that is easy to follow and enforce,” NAR said.
Filtering out listings by commission
The second prevents brokers and agents from filtering out listings from website displays based on buyer broker commissions or the name of the brokerage or agent. It passed with no discussion with 710 in favor and 74 opposed.
The policy reads:
Policy Statement 8.5: MLS Participants and Subscribers must not, and MLSs must not enable the ability to, filter out 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 IDX and VOWs now 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 changes wording to reiterate Realtors’ existing duty to inform clients about all relevant properties meeting their criteria,” NAR said.
A single MLS data feed
The board also approved a policy that requires MLSs to offer their broker participants a single data feed for all of the uses for which they have authorization. It passed with no discussion with 734 in favor and 26 opposed.
The policy reads:
Policy Statement 8.6:
MLSs must offer a Participant a single data feed in accordance with a Participant’s licensed authorized uses.
At the request of a Participant, MLS must provide the single data feed for that Participant’s licensed uses to that Participant’s designee. The designee may use the single data feed only to facilitate that Participant’s licensed uses on behalf of that Participant.
Brokerage back office feeds
The NAR board also approved a brokerage back office feed policy, which entitles brokers to an MLS data feed that they, their agents and their designated vendors could use for internal purposes. The vast majority of MLSs across the country provide such a feed, but there was previously no national standard.
The policy passed with no discussion with 754 in favor and 24 opposed.
The approved policies go into effect Jan. 1, 2022, and MLSs have until March 1 to implement them.
Editor’s note: This story has been updated.