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The nation’s largest multiple listing service rolled out changes on Wednesday that allow subscribers to include in a listing any concessions a seller is willing to consider, including for broker commissions.
The changes announced Tuesday by the California Regional Multiple Listing Service took effect Wednesday morning and will apply to the Matrix, Paragon and Flexmls, which combined serve an estimated 110,000 real estate users.
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The update includes concessions in price, or monetary contributions a seller can choose to offer toward a buyer’s costs in the transaction, in the listing. Previously that information was only recorded at closing. The concessions can include escrow or title fees, lender fees or loan discount points, property improvements, recurring or non-recurring costs and, importantly, broker fees.
“Due to their popularity, CRMLS is creating new optional fields called Concessions in Price (CiP), which will be visible at the listing level,” CRMLS said in an update to its members.
The update comes as real estate professionals and organizations across the country are making sweeping changes in line with proposed settlements of class action lawsuits that targeted the industry.
CRMLS said in its update that about 40 percent of closed listings on the MLS included concessions despite them not being advertised anywhere before today. The number of sellers offering concessions is expected to rise as the effects of the settlements take hold and more buyers ask sellers to help pay for their buyer broker.
Under a settlement agreement negotiated by the National Association of Realtors, buyers must have a signed buyer representation agreement before touring homes for sale with an agent. Those agreements will spell out how much the agent will be paid at closing, but not how.
The CRMLS update means sellers have the option to advertise to buyers and buyer agents a total amount of concessions offered as a percentage or dollar figure, which could then be used for various costs associated with the transaction.
The update provides users with the option of including one of four new fields:
- Concessions in Price: A text box for numerical input only. This amount must include any potential concessions in a single total amount.
- Concessions in Price Type: A selection to classify the number above as either $ or %
- Seller Considering Concessions? (Matrix and Flex): A selection of either Yes or No. If Yes, then the listing will include the auto-populated phrase: “A Seller may consider a buyer concession if made in an offer.”
- Seller Considering Concessions? (Paragon Only): A selection of either Yes or No. If “Y” the following will appear when hovering your cursor over the help (?) icon: “A Seller may consider a buyer concession if made in an offer
CRMLS said the change would give listing agents and sellers the ability to advertise their willingness to consider concessions at the listing level.
Buyer agents would get the ability to provide their clients with information about which listings offer concessions to help with closing costs. Buyers would get information about listings that might help them while searching for listings that meet their needs.
The input isn’t binding and indicate only whether a seller would consider offering concessions.
“Details regarding the concessions that may be offered should be discussed during the negotiations between the parties,” CRMLS wrote.
CRMLS Vice President Edward Zorn said the changes were “absolutely” made to be in the spirit of the settlement agreements and stated demands of the Department of Justice.
“This will help consumers,” Zorn said.
“The concept here is we want to keep as much of the benefit of transparency and negate or try to limit as much as we can the negative aspect of agent steering,” Zorn said. “I think we are at a strong balance in doing it the way we’re doing it.”
The Department of Justice has signaled it wants to see commissions “decoupled,” meaning buyers should be responsible for negotiating their broker’s commission on their own. The agency declined to comment about the CRMLS update.
Michael Ketchmark, lead plaintiffs’ attorney for the Sitzer | Burnett lawsuit that led to the settlements, also didn’t immediately say whether he believed the update was in the spirit of the settlements.
CRMLS will make the concessions information available to the real estate portals, which will decide for themselves whether to include on their consumer-facing listings.
