Getting Ready for MLS Changes August 1st

On the eve of pivotal updates to ValleyMLS next Thursday to comply with the recent NAR settlement, it’s crucial that you are prepared to embrace the new landscape in our industry. Read below to hit the ground running on August 1st.

What is this all about?

ValleyMLS, along with hundreds of other NAR-affiliated MLSs, has entered into a settlement agreement to resolve several lawsuits around the country relating to offers of compensation from listing brokers to buyers’ brokers.

There are two key practice changes:

🔑 First, listing brokers will no longer be allowed to communicate offers of compensation (whether from the listing broker or the seller) to buyers’ brokers through MLS, though they are free to make such offers through other means.

🔑 Second, a broker must enter into a written agreement with any prospective buyer before showing any MLS listing to that buyer, though there are some exceptions.

More information is available from NAR below at FACTS.realtor.

Why are these changes being made August 1st instead of August 17th?

To be in full compliance with the August 17th mandate, ValleyMLS will begin making local compliance changes on August 1, 2024. Making this change in advance of August 17th will allow time to adjust fields with our MLS vendor, Data Compliance vendor, Data Feed vendor, Showing Time vendor, and other vendors as needed. This provides advance time to correct any technical issues that could arise.

This will also allow time to help prepare members and answer questions. We understand that this change is not easy for anyone and are continually striving to do our very best to make sure that all of you are successful throughout this transition.

What will happen?

On Thursday, August 1st, ValleyMLS will remove all compensation fields and rules associated with submitting an offer of compensation via the MLS.

Additionally, ValleyMLS is removing compensation data from all MLS-provided services including Listing Input forms and screens, data feeds, and MLS reports and search forms. New rules will go into effect on August 1st.

What is the impact of these August 1st changes?

Once removed, Participants and Subscribers will not have access to these data elements. After August 1st, Participants are prohibited from using the MLS to make any offers of compensation (whether the compensation would be from the listing broker or the seller) to other participants on listings filed with the MLS.

Buyer Agreements

ValleyMLS will require any participant working with a buyer to enter into a written agreement (Buyer Showing Agreement) before providing a tour of a listing in the MLS.

In enforcing this rule, ValleyMLS will investigate reported violations, perform random audits, and verify documentation of compliance.

How do I explain compensation to clients?

Here are some key points you can use to remind clients how you’re compensated:

Compensation is always negotiable. At the start of the homebuying process or at any point before the transaction closes, buyers and sellers have the option to negotiate compensation.
Costs are spelled out to buyers and sellers. As part of the written listing agreement, sellers decide what fee they are willing to pay for their agent’s services and how much of that fee goes to the real estate agent who finds the buyer. Buyer agents tell their clients how much of their compensation comes from the total proceeds of the sale. At closing, both sellers and buyers are reminded how much each agent is being paid and by whom.
Agents only get paid if the home sells. Listing agents are typically paid from the proceeds of the sale. Then, they pay the buyer agent’s compensation. This payment model is crucial to ease the cost of purchasing a home and help more Americans access homeownership, especially for first-time buyers.
There are no standard commissions or service offerings. Compensation varies based on service, consumer preference, and the free market. But compensation can also fluctuate. You should also consider that there are different types of agents with varying commission structures and levels.

Click below for a video explainer on explaining compensation to clients.

How can ValleyMLS data be used/displayed?

ValleyMLS will not support any data use, effort, or attempt to create any platform for brokers to exchange offers of compensation (i.e., where offers of compensation are extended to multiple buyer brokers). Participants and MLS vendors are not permitted to use ValleyMLS data feeds to establish any such compensation platform.

Violation of these rules may result in revocation of MLS data feeds. Participants may include compensation information in their own listings on their own websites, signage, etc. as long as no other offers of compensation by other brokers are displayed..

Can offers of compensation be described in the remarks field in ValleyMLS?

No. Any offer of compensation (whether the compensation would be from the listing broker or the seller) communicated anywhere in the MLS will be prohibited as of August 1, 2024. This includes any field, photo, or document.

What about historical data?

The MLS is required to archive historical data so that is will no longer be accessible.

What about a field to enter pre-closing concessions like some other MLSs are using?

ValleyMLS will add a Seller Concession Y/N? field, which will be available on August 1, 2024.

Are we allowed to put seller concessions in the remarks section?

No. The terms of any seller concessions may only be communicated outside of the MLS.

Can we advertise compensation on our social media accounts?

Yes, you may advertise compensation on social media accounts, provided that the link is not coming directly from the MLS.

Would it be acceptable to have a sign that says "Buyer Agent Commission Offered" or “Buyer Agent Friendly” outside the home?

Yes. You also could put it in the house, if you would like.

Updated Forms

Coming Soon to the ValleyMLS Forms Library

Compensation Agreement Between Listing Broker and Buyer Broker
Agent to Agent Compensation Agreement

Other Resources

If you are a REALTOR member and have access to the Alabama Association of REALTORS Legal Forms, you may access them HERE.

Instructions on how to add the AAR forms in your Dotloop Library can be found HERE.

Other ValleyMLS changes coming August 1, 2024, can be found HERE.

On the eve of pivotal updates to ValleyMLS next Thursday to comply with the recent NAR settlement, it’s crucial that you are prepared to embrace the new landscape in our industry. Read below to hit the ground running on August 1st.

What is this all about?

ValleyMLS, along with hundreds of other NAR-affiliated MLSs, has entered into a settlement agreement to resolve several lawsuits around the country relating to offers of compensation from listing brokers to buyers’ brokers.

There are two key practice changes:

🔑 First, listing brokers will no longer be allowed to communicate offers of compensation (whether from the listing broker or the seller) to buyers’ brokers through MLS, though they are free to make such offers through other means.

🔑 Second, a broker must enter into a written agreement with any prospective buyer before showing any MLS listing to that buyer, though there are some exceptions.

More information is available from NAR below at FACTS.realtor.

Why are these changes being made August 1st instead of August 17th?

This will also allow time to help prepare members and answer questions. We understand that this change is not easy for anyone and are continually striving to do our very best to make sure that all of you are successful throughout this transition.

What will happen?

On Thursday, August 1st, ValleyMLS will remove all compensation fields and rules associated with submitting an offer of compensation via the MLS.

Additionally, ValleyMLS is removing compensation data from all MLS-provided services including Listing Input forms and screens, data feeds, and MLS reports and search forms. New rules will go into effect on August 1st.

What is the impact of these August 1st changes?

Buyer Agreements

ValleyMLS will require any participant working with a buyer to enter into a written agreement (Buyer Showing Agreement) before providing a tour of a listing in the MLS.

In enforcing this rule, ValleyMLS will investigate reported violations, perform random audits, and verify documentation of compliance.

How do I explain compensation to clients?

Here are some key points you can use to remind clients how you’re compensated:

Compensation is always negotiable. At the start of the homebuying process or at any point before the transaction closes, buyers and sellers have the option to negotiate compensation.

There are no standard commissions or service offerings. Compensation varies based on service, consumer preference, and the free market. But compensation can also fluctuate. You should also consider that there are different types of agents with varying commission structures and levels.

Click below for a video explainer on explaining compensation to clients.

How can ValleyMLS data be used/displayed?

Violation of these rules may result in revocation of MLS data feeds. Participants may include compensation information in their own listings on their own websites, signage, etc. as long as no other offers of compensation by other brokers are displayed..

Can offers of compensation be described in the remarks field in ValleyMLS?

No. Any offer of compensation (whether the compensation would be from the listing broker or the seller) communicated anywhere in the MLS will be prohibited as of August 1, 2024. This includes any field, photo, or document.

What about historical data?

The MLS is required to archive historical data so that is will no longer be accessible.

What about a field to enter pre-closing concessions like some other MLSs are using?

ValleyMLS will add a Seller Concession Y/N? field, which will be available on August 1, 2024.

Are we allowed to put seller concessions in the remarks section?

No. The terms of any seller concessions may only be communicated outside of the MLS.

Can we advertise compensation on our social media accounts?

Yes, you may advertise compensation on social media accounts, provided that the link is not coming directly from the MLS.

Would it be acceptable to have a sign that says "Buyer Agent Commission Offered" or “Buyer Agent Friendly” outside the home?

Yes. You also could put it in the house, if you would like.

Updated Forms

Coming Soon to the ValleyMLS Forms Library

Compensation Agreement Between Listing Broker and Buyer Broker

Agent to Agent Compensation Agreement

Other Resources

If you are a REALTOR member and have access to the Alabama Association of REALTORS Legal Forms, you may access them HERE.

Instructions on how to add the AAR forms in your Dotloop Library can be found HERE.

Other ValleyMLS changes coming August 1, 2024, can be found HERE.