Changes from the National Association of Realtors Settlement

Changes to BAREIS MLS® Rules and System

Effective August 12, 2024

1. Offers of Compensation will be Removed from the MLS and MLS Data Feeds

All compensation fields will be removed from listing entry and display in BAREIS Plus and BAREIS Rules will prohibit posting any offer of compensation or commission for brokers or agents, anywhere in the MLS— including remarks fields, attached documents, links, or virtual media. All historical broker co-op info will be removed from display in BAREIS Plus, and this information will no longer be provided in any BAREIS data feed.

2. Written Buyer Broker Agreements will be Required Before Showing a Residential Property to a Buyer

BAREIS Rules will require any member working with a buyer to have a written agreement before touring a listed residential property of 1 – 4 units with a buyer. That agreement must describe the broker’s compensation, the amount must be objectively ascertainable and not open-ended, and the broker may not receive compensation from any source that exceeds the amount in the agreement. The agreement must also conspicuously disclose to buyers that commissions are not set by law and are fully negotiable.

3. Seller Approval will be Required for Payments from Listing Agent to Third Parties

BAREIS Rules will require members to disclose to sellers and obtain seller approval for any payment or offer, if any, the listing broker, or seller makes to another broker, agent, or representative (e.g., attorney) working with a buyer.

4. Required Disclosure to Buyers & Sellers that Commissions are Negotiable and not Set by Law

BAREIS Rules will require all members to disclose to sellers and buyers that commissions are not set by law and are fully negotiable in listing agreements, in their buyer broker agreements, and in pre-closing disclosure documents, if any.

5. MLS Data or Data Feeds Must Not Directly or Indirectly Establish or Maintain a Platform to Make Offers of Compensation from Multiple Brokers

BAREIS Rules will prohibit members from using MLS data or data feeds to establish a platform to display offers of compensation from other brokers.

6. No Advertising Services for Free

Members are prohibited from representing their services as an agent as free unless the agent will receive no financial compensation from any source for those services.

7. No Filtering Out Listings by Compensation or Brokerage/Agent Name

Members are prohibited from filtering out listings communicated to their clients based on the existence or level of compensation offered to the buyer’s broker, or by brokerage or agent name.

8. “Cooperation” is Defined

“Cooperation” means the activity of a Broker Participant sharing information on one or more listed properties or making any such listed property available to other Broker Participants for showing to prospective Buyers when it is in the best interests of their respective Client(s), and “Cooperate” means the process by which a Broker Participant engages in Cooperation. Notwithstanding the generality of the forgoing, in no event shall “Cooperation” or “Cooperate” refer to, mean or include any form of sharing, setting or establishing any form of compensation, however determined, payable to any Buyer Broker.

9. “Concession” is Defined

“Concession” means a form of inducement or incentive of value offered by a Seller to a Buyer, or a prospective Buyer, in connection with the Buyer’s purchase, lease or exchange of the Seller’s property, including an offer to pay or otherwise underwrite or reimburse certain of the Buyer’s expenses relating to the Buyer’s purchase, lease or exchange of the Seller’s property, including acquisition costs or post-closing repairs of Seller’s property or improvements, such as all or a portion of Buyer’s closing costs or recording or escrow fees, financing or loan fees or costs, inspection costs, or survey or appraisal expense

FAQ

Here are just a few questions that these changes have created. The situation will continue to evolve as a ‘new norm’ is established. As always, don’t hesitate to reach out to me with any additional questions.

What is the focus of the MLS without an offer of compensation to the buyer’s broker?

In a word, cooperation. The newly defined purpose of BAREIS MLS® is a means by which: (a) Cooperation between Participants is facilitated; (b) information relating to sale, lease or exchange of real property is accumulated and disseminated to enable authorized Participants to prepare appraisals and other valuations of real property; (c) Participants engaging in real estate appraisal contribute to common databases; and (d) the orderly correlation and dissemination of listing information among the Participants is facilitated so that they may better serve their Clients and customers.

Listing brokers and sellers have never been required to offer buyer broker compensation in the MLS and compensation has always been negotiable. Whether entering listings or searching for properties in BAREIS MLS®, brokers and agents know that they benefit from the widespread advertising for their listings and access to the broadest inventory of available properties in their marketplace, as well as knowledgeable, professional MLS staff to assist agents in keeping their listings up-to-date, accurate and accessible.

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What will happen to listings in MLS with a broker co-op posted on August 12th?

Listings that are in the MLS will no longer display an offer of compensation to the buyer’s broker effective the evening of August 12th.

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Does this rule apply to all property types? What about new home construction and vacant land?

Yes, this rule applies to all property types, including Lease listings. If the property is listed in the MLS, the listing cannot contain any reference to commission, compensation, fees, or bonuses paid to buyer’s agents—regardless of property type or category.

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How will agents communicate to other agents and the public that a seller or listing brokerage is willing to pay compensation to the buyer’s broker?

If a listing broker wants to communicate that buyer broker compensation is available for a listing, that information can be conveyed outside the MLS—on the listing broker’s website, or via email or phone calls, for example. It must not be conveyed on the MLS or through documents that are attached to or linked to a listing in the MLS.

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If a seller wants to provide incentives to the buyer, can those incentives be promoted in MLS?

Yes. BAREIS rules currently allow and will continue to allow the listing agent to post in the Public or Confidential remarks field that seller incentives or credits to the buyer may be available. Statements in Public Remarks should be general, “Buyer credits may be available,” and statements in Confidential Remarks may be more specific, “Seller willing to consider offers with requests for rate buy down or credits towards closing costs. Call agent for more details,” and should not mention an amount that would be paid for commission, compensation, or broker co-op fees, if any.

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Can the buyer broker accept bonuses or financial incentives from the seller or the listing broker that are more than the amount listed in the residential buyer representation agreement?

No. The buyer broker may not receive compensation for brokerage services from any source that exceeds the amount or rate agreed to in the agreement with the buyer.

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Why did BAREIS join the settlement?

There were multiple reasons the BAREIS Board of Directors voted unanimously to approve BAREIS participation in the settlement agreement including alleviating the cost and unpredictable outcome of continuing to defend BAREIS against the copycat cooperative broker compensation lawsuit filed against BAREIS in December. The most important reason is the desire to provide a clear path forward for BAREIS members to transact real estate. The removal of the offer of compensation from the MLS database and the use of written agreements when working with buyers will become the new normal for real estate practitioners throughout the country, including California.

Additional Resources

NAR Settlement: Get the Facts website: https://www.nar.realtor/the-facts

The Bottom Line

As with any changes, the market and the industry will quickly adjust, and having an agent on your side who is paying attention and has their finger on the pulse of the market is going to position you for success best. If you have any questions about how this might impact you, please reach out.