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Making the MLS More Transparent: NAR Committee Recommendations

NAR’s Technology Board made recommendations that will go into effect if approved by a Multiple Listing Service committee and NAR’s board. Among them: Participants can’t represent that their services are free, and listing ads can’t be sorted or filtered based on the level of compensation a cooperating broker offers.

CHICAGO – In a meeting this month, the National Association of Realtors®’ (NAR) MLS Technology and Emerging Issues Advisory Board passed a series of motions designed to ensure that association-operated multiple listing services (MLS) are meeting the needs of consumers and broker subscribers. They would:

  • Prohibit MLS participants and subscribers from representing 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.
  • Prohibit MLS participants and subscribers from filtering or restricting MLS listings that are searchable by and displayed to consumers based on the level of compensation offered to the cooperating broker or by the name of a brokerage or agent. New restrictions would also keep MLSs from enabling this type of filtering.

The advisory board, which met Sept. 9-10 in Chicago, also recommended changes to the Internet Data Exchange (IDX) policy and the Virtual Office Website (VOW) policy to make them consistent with the prohibition on filtering and restricting MLS listings.

“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,” says Greg Zadel, CRB, CRS, and chair of the advisory board. He says the proposed policies will reinforce what already exists in NAR policies and the Code of Ethics.

A higher level of service

In a separate action, advisory board members approved a series of recommendations focused on improving the level of service MLSs provide to participants and subscribers.

The advisory board approved recommendations from the MLS Standards Work Group that would set best practices for:

  • Disciplining participants who violate MLS rules
  • Informing participants on the MLS website about the data feeds and technical support available to them and their vendors
  • Sharing aggregated data with state associations and NAR for statistical and advocacy purposes
  • Clarifying MLS officers’ and directors’ fiduciary duty
  • Developing an annual MLS strategic plan with specific consideration to leadership training, partnerships, technology, participant outreach, financial independence and diversity, equity and inclusion

A sixth recommendation from the MLS Standards Work Group is that MLSs, by July 1, 2022, have a written plan with a timeline and cost estimate for coming into compliance with the Real Estate Standards Organization’s (RESO’s) Data Dictionary.

These Work Group recommendations will go through the Multiple Listing Issues and Policies Committee in November but do not require an NAR Board of Directors vote, since they would not be mandated and would not create policy, says Zadel. Rather, MLSs would be asked to consider local adoption as a means of providing a higher level of services to participants and subscribers.

The Advisory Board also considered and approved in concept recommendations that

  • MLSs be required to offer participants, or their designees, a single data feed in accordance with their licensed authorized use
  • MLSs be required to provide participants with a brokerage back-office feed of data as defined in the recommendation

Establishing standards for data feeds will make it easier for the brokers to incorporate MLS data into the many productivity tools and reports they use today in their business, says Zadel. “This will empower MLS participants with the information they need to better serve their clients and customers.”

Finally, the advisory board recommended changes to the IDX and VOW policies that would require participants’ IDX displays and VOWs to display the listing firm’s contact information “at least as prominently as any other contact information or lead form on the site.”

Ensuring that the listing broker attribution is clear would provide a more accurate representation to the public, Zadel says, would improve consumers’ ability to seek information on the property, and is consistent with the “True Picture” requirement of Article 12 in NAR’s Code of Ethics.

At a meeting in October, the advisory board will consider other potential policy changes, including one that would address the disclosure of compensation in public displays.

If the policy recommendations are approved by the Multiple Listing Issues and Policies Committee at its Nov. 13 meeting and by the NAR Board of Directors at its Nov. 15 meeting during the Realtors® Conference & Expo, the policies will go into effect Jan. 1, 2022, and MLSs will then have until March 1 to adopt changes locally.

Source: National Association of Realtors® (NAR)

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