Dear Joey: MLS Policies Change? How Does It Affect Me?
NAR updated MLS rules at its recent convention, and Realtors may discover changes within their MLS on or before the Jan. 1 effective date. One change applies to marketing, however: A buyer’s agent can’t advertise their services as “free.”
ORLANDO, Fla. – Dear Joey: I’ve been reading recent headlines and understand the National Association of Realtors® (NAR) passed six new Multiple Listing Service (MLS) policy changes. What does that mean for me – what will change? And when will these take effect? – Real Estate Professional
Dear Real Estate Professional: I’m glad you’re keeping up with NAR’s newly approved MLS policy changes. I’ll provide a brief explanation addressing each new policy.
Please note, however: Further implementation guidance will be coming from the Council of Multiple Listing Service, and NAR plans to post a document on frequently asked questions (FAQs). In addition, some implementation and enforcement items will vary depending on your market and MLS.
The recently improved policies “time for transparency”
1. Policy Statement 8.6: One Data Source
MLSs must offer their participants a single data feed in accordance with the participants’ licensed authorized uses, and it must be Real Estate Standards Organization (RESO) compliant. NAR’s reason for the change? To create efficiencies for brokers who participate in an MLS and who use MLS data for multiple purposes.
What this means: A participant will no longer need to consume multiple data feeds when using MLS data for different purposes. For example, if a participant currently has two feeds – one data feed for a CRM tool and one data feed for a back-office tool – they can have a single feed power both of those products instead of two.
2. Policy Statement 8.7: Brokerage Back Office Feed
Entitles MLS participants to use – and requires MLSs to provide – a brokerage back-office data feed. The new policy defines the data, use and terms of the feed. Participants have no opt-out option for including their listings. The rationale for the change? Brokerages can do a better job serving clients and customers if they have access to a comprehensive data feed within their brokerage, one that, for example, includes productivity tools, proprietary products and the ability to generate custom reports.
What this means: An MLS must provide to participants or their designees a comprehensive data feed of all MLS fields to use in their brokerage. It’s important to understand what Broker Back Office (BBO) data and use means, please read refer the “Summary of MLS Policy Changes” on NAR’s website.
3. Internet Data Exchange (IDX) Policy Statement 7.58 and VOW Policy Statement 7.91: IDX and VOW Broker
Participants’ IDX displays must identify the listing firm, and an email or phone number provided by the listing participant, in a “reasonably prominent location” and “readily visible color and typeface” not smaller than the median used in the display of listing data. The same standard would also apply to VOWs, but it’s optional. The rationale: To provide more consistency and prominence to the listing broker when consumers view listings.
What this means: When viewing an IDX display listing, a consumer will now see the listing firm identified along with an email or phone number provided by the listing participant. Further implementation guidance will be determined by your respective MLSs.
4. Display of listing broker offer of compensation
MLSs must include the listing broker’s offer of compensation for each active listing displayed on consumer-facing websites and in MLS data feeds provided to participants and subscribers. It also requires MLSs to permit participants or subscribers, at their discretion, to share offers of compensation through IDX and VOW displays, or through any other form or format provided to clients and consumers. Information about offers 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. The rationale: To provide transparency to the consumer.
What this means: The offer of compensation will now be displayed on all MLS public-facing websites for consumers to view. Should a participant or subscriber wish to display this on their IDX display or VOW, they also have that option. However, this doesn’t apply to client portals or MLS printouts.
5. MLS Policy Statement 8.4: Services advertised as “free”
MLS participants and subscribers cannot represent their brokerage services to a buyer as “free” or something similar, such as “available at no cost” to their client, unless the participant or subscriber will receive no financial compensation from any source for those services. Similar language was passed in regard to Standard of Practice 12-1. The rationale: To provide increased transparency to the consumer.
What this means: Realtors® and other MLS participants and subscribers cannot say “we work for free” or “we don’t charge for our services” with only one exception: They actually won’t receive any compensation at all for all services provided. Similar language is being added to Standard of Practice 12.
6. MLS Policy Statement 8.5: Non-filtering listings based on offers or compensation or name of the brokerage or agent
This prohibits MLS participants and subscribers from filtering out or restricting listings in certain ways: In listing information that’s searchable and displayed to consumers, the search result rankings cannot be based on the level of compensation offered by the cooperating broker, nor can filtering be done based on the name of a brokerage or agent.
Policy Statements 7.58 and 7.91 are also amended to bring IDX and VOW policy in line with this rule. The rule doesn’t prohibit participants from sorting listings to show their own listings first on their IDX displays and virtual office websites. The rationale: To ensure transparency and access to all listings, as well as to increase the pro-competitive, pro-consumer nature of the MLS.
What this means: A participant or subscriber who compiles a set of listings to present to clients or customers will no longer be able to filter those listings based on compensation or the name of the brokerage or agent.
I hope this provides a brief explanation of what is to come. Please remember these policies aim to increase efficiency and transparency for the Realtor and consumer. As a reminder, details regarding implementation and enforcement will be determined by your local MLS. I would encourage everyone to watch for more guidance from your local MLS.
Regarding timing, the new policies take effect Jan. 1, 2022, however, MLSs have until March 1, 2022, to implement them. The time gap will give the MLSs time to get familiar with the changes, educate Realtors and implement any necessary updates.
For more information on any these changes, refer to “Summary of MLS Policy Changes” on NAR’s website.
Joey Sale is the Director of Local Association Services for Florida Realtors
Note: Advice deemed accurate on date of publication
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