April 18th, 2024 LEGAL UPDATE: What does the NAR settlement mean for Unlock ABOR MLS?

 

Hi George-Vance,   In the weeks since NAR announced a proposed settlement agreement, misconceptions have been circulating throughout the marketplace about what the settlement terms mean and when the proposed MLS rules will take effect. ABoR and Unlock MLS have worked with legal counsel during this time to ensure what we share is accurate and addresses the important questions the settlement announcement has raised.    This email clarifies the NAR settlement terms as they pertain to Unlock MLS. Please take the time to read both this email and the latest update on our Legal Update Page.   The proposed MLS rule changes will not take effect locally until September (at the earliest). It’s important to clarify that the plaintiffs’ attorneys have not yet filed the proposed settlement with NAR in court. Until that filing, the timeline for implementing the business practice changes called for in the settlement, including new MLS rules, is not set. As of today, the earliest that the proposed MLS rules changes will need to be implemented in Unlock MLS is early September. Communications from others that state a July implementation date do not apply to Unlock MLS. What are those MLS rules changes, exactly? How do they impact my business?   Offers of buyer agent compensation will no longer be in the MLS. Some buyers may pay their agent the compensation they agree to directly, and some may seek help in compensating their agent by seeking concessions or buyer broker compensation from the seller. Going forward, you can think of buyer’s agent compensation like any other seller contribution to the buyer’s expenses that is offered and negotiated as part of a transaction. Here are the most important changes you need to know:   In the MLS: Unilateral and binding offers of compensation will no longer be listed in the MLS and will not be included in any MLS listing data feeds to syndicated websites or apps, including Broker IDX and VOW feeds. Brokers can, however, display offers of compensation on their own listings on their own sites. For Buyer’s Agents:  Unlock MLS must require all brokers and buyer’s agents to have a written agreement before showing a listing. That agreement must describe the broker’s compensation and the broker may not receive compensation from any source that exceeds the amount in the agreement. When submitting an offer, buyers can request that the seller contribute to the costs of the transaction, including buyer broker fees.  For Listing Agents: The MLS can house remarks about your seller’s willingness to offer contributions to the buyer’s expenses, which the buyer may use for buyer broker fees. Those amounts, however, cannot be conditioned on the buyer’s retention of an agent or payment to a buyer’s agent. How will lenders treat compensation changes? Fannie Mae and Freddie Mac, two crucial federal financial entities, have confirmed that the exclusion of seller payment for buyer agent commissions from limits on seller concessions will persist. This affirmation echoes a previous statement by the Federal Housing Administration last month. The corporations clarified that it's not a new regulation but rather a reaffirmation enabling home transactions to proceed without disruption.   How can I get ahead of these big changes?   The next few months are an ideal opportunity to enhance your communication with your clients about these changes, your value as an agent, and the value of the MLS as a real-time look at the pulse of the market during these changes.    As always, we’re here to help. ABoR and Unlock MLS are actively working with our legal counsel to develop new transaction forms and resources to support you through this transition. They’re coming soon, so stay tuned to our Legal Update Center!   Emily Chenevert, CEO ABoR and Unlock MLS   Closing the Loop: Multidistrict Litigation Decision   On Friday, April 12, the motion to compile all commissions-related litigation (including QJ Team in which ABoR and Unlock MLS are defendants) into a single case for pre-trial matters was denied. We are pleased with this decision. The court’s decision not to grant MDL has no impact on the proposed NAR settlement.    © 2024 Austin Board of REALTORS® | ABoR.com Manage Email Preferences