Starting February 15, the nation’s largest multi-listing service, California Regional MLS, along with 65 other MLS across the country, will allow its agent and broker subscribers to view the buyer’s brokerage commissions.
CRMLS, which has more than 104,000 subscribers, announced that it is making the change as part of a proposed settlement between the National Association of Realtors and the US Department of Justice.
On November 19, the DOJ filed an antitrust lawsuit against NAR alleging some of its rules were restrictions on broker competition. In a settlement proposal filed at the same time as the lawsuit, NAR agreed to repeal a rule that previously prohibited the public display of commissions offered by the listing of brokers to the buyer’s brokers in order to bring a buyer to a sale also known as SOC (Selling Office Compensation)).
“We have brokers who want to view this information and it is a very simple rule change based on the clear language of the proposed NAR and DOJ settlement document,” Art Carter, CEO of CRMLS, told Inman via e- Mail. “There is no reason to keep our brokers waiting.”
In the past few weeks, at least two big-name real estate companies, RE / MAX and Redfin, have started showing commissions to buyer agents in the 65 markets where MLS made it possible to show the data.
CRMLS subscribers will have the option to view buyer agent commissions on their own IDX (Internet Data Exchange) websites – just like any other IDX space, CRMLS General Counsel Edward Zorn Inman said in a telephone interview. IDX websites display pooled entries from an MLS.
However, listing brokers and listing agents cannot refuse to publicly display the commission they are offering. “The proposed DOJ-NAR settlement does not give the listing agent opt-out rights,” Carter said.
According to Carter, whether the commission display contains an explanation is up to the individual broker or agent who operates their own IDX site. “It is up to the agent how to communicate and market their own value propositions,” he said.
According to Carter, CRMLS will not include the buyer’s commission in its feeds to third-party websites like realtor.com, Homes.com or Homesnap.com. Listing brokers are already allowed to display compensation for their own listings on their own website or on other websites where they choose to post their own listing, he said.
“CRMLS has no rule that restricts what information a listing broker can display about its own listing,” said Carter. “The rules regulate what can be displayed via the listing of another broker. However, other Brokerage Selling Office commission amounts may not appear in feeds to third party websites. “
Listing agents and brokers must offer a fee to the sales office when submitting a listing to CRMLS, according to a NAR-binding policy, Carter added. Northwest MLS, which is not affiliated with Realtor and was likely the first MLS to allow the public display of commissions for buyer agents back in October 2019, does not have this requirement.
Nor is CRMLS waiting to implement further rule changes in the proposed NAR-DOJ regulation. In its lawsuit, the DOJ criticized NAR rules that allowed MLS subscribers to filter search results based on compensation and that prevented non-brokers from accessing lockers.
CRMLS reached out to lockbox company Supra to discuss how non-CRMLS licensees could be granted access. The supra competitor SentriLock, which belongs to NAR, already offers one-time usage codes for non-members, according to Zorn.
In late November or early December, according to Zorn, CRMLS was able to stop searching for compensation amounts on most of its four front-end platforms, which are Corelogic’s Matrix, Black Knights Paragon, FBS’s Flexmls, and Rapatton’s System. On Thursday afternoon, Zorn said he wasn’t sure which of the platforms made the change.
Zorn said agents could filter searches for compensation for reasons other than directing a customer away from a particular property, which they deemed unethical. For example, Zorn said, realtors can do such searches at the request of their buyer-customers, if buyers don’t want to fall in love with a home they can’t afford because they have to pay their buyer’s agent when the listing agent bids does not indicate at least the amount that the buyer contracted to pay his agent.
“This could actually happen in a seller’s market because honestly sellers have many buyers available,” said Zorn. “So if you put pressure on the commissions, this scenario that I just painted is possible.”
Regardless, at the time of the change, CRMLS determined that of the more than 250,000 actively stored searches in the system, less than 1.5 percent of those searches used the compensation field. This includes searches that agents have saved for themselves as well as searches on behalf of buyers where agents have sent them search results or set up list notifications for them, Zorn said.
“It’s a very, very rarely used search,” said Zorn. “So it’s no big deal for us to take it out.”
At a competitive workshop held by the DOJ and the Federal Trade Commission (FTC) in 2018, Carter pointed out that MLS only track the remuneration of the sales office, not the total commission the listing broker receives from the seller.
“We can keep track of how much the sales office is being paid, but it’s not a complete picture of the commission structure that is paid on a real estate transaction,” Carter said at the workshop. “So from my point of view, we can pursue whatever we want that is offered on the sales side, but honestly it’s market-oriented. And you will see fluctuations in this number depending on whether it is a seller’s market or a buyer’s market. “
While some supporters of the public display of commissions feel that this will help lower commissions, it is possible for sellers to see what other sellers are offering and that this will bolster the status quo or even increase buyer agent commissions .
“We have to see what happens, but let’s just say I won’t be surprised if you don’t see downward pressure just because it’s showing,” said Zorn. “I think it’s good that the consumer receives good information. This is important. As an MLS, it doesn’t matter to us. Whatever is good for helping people clear real estate transactions and making it easier for consumers and brokers to close the deal is good for us. “
When asked why MLS doesn’t track total commission, Carter said, “Ask NAR; it is hers [mandatory] Politics. We believe this is happening for antitrust reasons. “
Inman has reached out to NAR and will update this story if we hear anything.
Email Andrea V. Brambila.
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