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The nation’s second-largest multiple listing service will soon add the ability for listing brokers to signal that sellers are willing offer buyer concessions when they list a home for sale.
Beginning June 11, Bright MLS, which boasts more than 100,000 subscribers in six states in the Mid-Atlantic region, will turn on two data fields that listing brokers or their agents have the option — but are not required — to fill out when they submit a listing to Bright’s platform.
The fields are a response to the National Association of Realtors’ proposed settlement of multiple antitrust lawsuits brought by homesellers. In part, the deal requires Realtor-affiliated MLSs such as a Bright to eliminate the ability for listing brokers to offer buyer brokers compensation via the MLS.
In response, some MLSs, including the nation’s largest, California Regional MLS, have decided to add listing seller concession fields to their platforms. Such MLSs, including Bright, already have seller concession fields for when a listing closes, but not when it is entered into the MLS. Bright will also be updating its closing seller concession fields.
“Bright must take steps to make changes to our rules and systems, to adhere to the terms of the settlement and increase transparency for the consumers we all serve,” the MLS said in an announcement on its website Thursday.
“Bright will soon be making updates to listing entry and to our policies to move forward together into a new era of real estate. Bright has worked closely with our associations, board, legal counsel, and leadership to help chart the most collaborative, transparent, and effective path toward the future of real estate in the United States. ”
Currently, Bright has closing-related fields that allow listing brokers or their agents to state whether the seller gave a concession, the amount, and the recipient, as well as an open text box to detail the type of concession.
Starting in June, Bright will add two seller concession fields available at listing entry. One will be a Yes/No field asking if the seller will offer a concession. The other will be a field asking for the amount of the concession and if the concession will be a dollar amount or a percentage of the home’s sale price. Listing brokers and agents have the option of not filling either of the fields out or of only filling out the first Y/N one, without designating an amount or the form of the amount, if they desire.
“MLS subscribers will not be permitted to indicate a specific amount of buyer-broker compensation in these new fields, remarks, or anywhere within the MLS systems,” Bright said.
Source: Bright MLS
There will be no option to specify the type of concession being offered when the listing is being entered. But Bright will be adding four new concession fields at closing where listing agents and brokers can specify whether sellers made concessions toward home repairs or improvements, finance-related costs, buyer’s broker costs, or closing costs and the dollar amounts for each.
Rene Galicia
“Although it’s not required by the settlement, it is consistent with and it is addressed as part of the settlement that MLSs can continue to capture and display seller concession information,” Rene Galicia, Bright’s executive vice president of customer advocacy, told Inman.
“We looked at our data, and we saw that, although we don’t have a field today, subscribers were including concession information, credits, etc, in a substantial number of listings every year, and so to structure that data and ensure that nothing is lost in terms of the transparency of the seller’s ability to properly market their home and offer concessions, we’re adding these fields.”
Galicia added that agents and brokers write in concessions in agent or public remarks on “several thousand listings a year” because they don’t have dedicated listing concession fields.
According to NAR’s proposed settlement, the deal does not prevent “sellers from offering buyer concessions on a Realtor MLS (e.g., for buyer closing costs), so long as such concessions are not limited to or conditioned on the retention of or payment to a cooperating broker, buyer broker, or other buyer representative.”
Galicia stressed that the information entered in the listing seller concession fields was not binding.
“These aren’t obligatory,” Galicia said. “They are invitations to negotiate. So even though they’re listed on the MLS, they still have to be asked for and documented as part of the purchase agreement.”
“The goal that we hope here is that the seller can communicate that they have a pool of money that they’re willing to negotiate against,” Galicia added.
“If a buyer needs help … they might ask for the seller to pay an amount towards buyer broker fees, inspections, repairs. Concessions is a broad term that we use here. We define it as really any credits from the seller to the buyer.”
Covered MLSs have until August 17 to implement the changes required by the NAR settlement. Because August 17 is a Saturday, Bright will be making its changes on August 14, including removing its compensation fields and adopting new rules requiring buyer broker agreements.
“The thinking behind releasing the concessions field on June 11 and then adopting the NAR rules on August 14 is so that we give our subscribers, our agents, our brokers, a running head start to make sure that they can transition smoothly once the settlement-related changes go into effect,” Galicia said.
Source: Bright MLS
The new concession fields will be available to third-party listing portals as well as to agent and broker listing sites, according to Galicia.
“That’s something that we want to maintain — that transparency in the marketplace — so that buyers, wherever they find that listing, they can see readily what a seller is potentially offering or what they can try to negotiate based on what the seller has indicated,” Galicia said.
So what will prevent the new listing concession fields from becoming new compensation fields that serve as a workaround around the settlement?
“A couple things: 1. We expressly in our rules prohibit and will prohibit the sharing of compensation on the MLS. It’ll come with rules enforcement, so there’ll be fines behind that, and 2. We’ll actively monitor through our staff, through algorithms,” Galicia said.
“The concessions field is not a proxy for compensation,” Galicia added. “That’s expressly prohibited in our rules. This is just about what the seller is offering to cover or pay for on the buy side. So this isn’t about commissions. This isn’t about the broker to offer compensation. This is about the seller and their offer, or their idea to entertain an offer at least.”
He also emphasized that, starting Thursday, Bright will embark on a campaign to educate its subscribers about the changes.
“We want to make sure that everyone’s on the up and up,” Galicia said. “We’re doing a lot of outreach over the next several months with subscribers, through our local associations, through broker office training and also partnering with our state associations to make sure that we’re all out there together sharing the same message and doing a lot of training.
“You’re not going to be able to get away from our training. We will make contact with each and every subscriber to ensure that they know how this all works and what the rules are. We want to make sure that they’re compliant with the rules, and, more importantly, that they’re doing right by consumers and how they use our system.”
Asked what would prevent listing brokers from deciding to just offer what they offer now in buyer broker compensation — typically 2.5 percent or 3 percent, depending on the market — Galicia said Bright’s compliance team would be on the lookout.
“We’re fortunate enough to have a full-time compliance team on staff, and so through staff time, through algorithm detections leveraging AI and other programming, we’ll be able to spot-check behavior so that, if we see consistently certain amounts from a certain brokerage or certain agents we can look into that,” Galicia said.
“Part of what we do on any rule is we do random audits where we’ll ask for copies of listing agreements or selling instruction, and so if there’s anything that is not in compliance with our rules, we’ll take action.”
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