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Settlement MLS Updates

Navigating the Settlement

NorthstarMLS and the real estate industry are responding to the National Association of REALTORS®’ (NAR) announced settlement of several lawsuits 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 from the seller) to buyers’ brokers through MLS, though they are free to make such offers via other means. Second, a broker must enter a written agreement with any prospective buyer before showing any MLS listed property to that buyer, though there are some exceptions.

The following is a look at the new requirements and the changes you can expect to see within NorthstarMLS rule and offerings.

MLS Settlement Requirements

Full details about NorthstarMLS’s implementation can be found in the resources below:

The details of the requirements for MLSs can be found in Appendix B of the proposed Settlement Agreement beginning on page 50.

NorthstarMLS Implementation of Settlement Requirements

Effective August 15, 2024, NorthstarMLS will implement the following changes to comply with Appendix B of the Settlement Agreement:

1 – No compensation fields, no offers of compensation in MLS

NorthstarMLS will remove all compensation fields, and rules associated with submitting an offer of compensation to the MLS. This means when you enter a new listing, there will be no compensation fields at listing input. Additionally, Northstar MLS is removing compensation data from historic listings and from all products and services. After August 15, participants are prohibited from using the MLS to make any offer of compensation (whether the compensation would be from the listing broker or the seller) to other participants on listings filed with the MLS.

2 – No support of compensation platforms, services, aggregation, etc.

NorthstarMLS 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 MLS data feeds to establish any such compensation platform.

3 – Buyer agreements

NorthstarMLS will require any participant working with a buyer to enter a written agreement before providing a tour of a listing in the MLS. In enforcing this rule, MLS will investigate reported violations and verify documentation of compliance.

4 – Concession fields

NorthstarMLS currently allows incentives offered from the sellers to the buyers to be described in the agent or public remarks. NorthstarMLS is not creating any new fields or modifying any currently available concession fields (pre-or-post-closing). We have updated our guidance on the remarks field that already permits concessions to be included. This guidance reflects the prohibition of conditioning concessions on paying for professional services (e.g., for buyers’ brokers) and clarifies that remarks communicating compensation for buyers’ brokers are not permitted.

5 – Resources

The following documents and forms are available for use and reference:

  1. Appendix B of the settlement agreement
  2. MNR (forms)
  3. NorthstarMLS Rules and Regulations (update effective 8/15)
  4. Seller Incentives to Buyers (pre-sale seller concessions/buyer incentives)
  5. Facts.realtor

We are committed to supporting subscribers as we implement the changes to our service. If you have questions about these changes, please email us at rules@northstarmls.com .

Settlement FAQ

1 – What changes is NorthstarMLS implementing following the proposed settlement agreement?

The following are the key policy changes:

  1. Eliminate and prohibit any requirement of offers of compensation on the MLS from listing brokers or sellers to buyer brokers or other buyer representatives.
  2. Retain and define “cooperation” as a prerequisite for MLS Participation.
  3. Eliminate and prohibit MLS Participants, Subscribers, and sellers from making any offers of compensation in the MLS to buyer brokers or other buyer representatives.
  4. Eliminate all broker compensation fields and compensation information on the MLS.
  5. While an MLS participant may continue to make offers of compensation on their own website for their listings only, the policy change prohibits the use of NorthstarMLS data or resources to create, facilitate, or support any non-MLS mechanism (including  providing listing information to an internet aggregator’s website for such purpose) by Participants, Subscribers, or sellers to compile offers of compensation to buyer brokers or other buyer representatives. 
  6. Prohibit the use of MLS data or data feeds to directly or indirectly establish or maintain a platform for offers of compensation from multiple brokers or other buyer representatives.   
  7. Reinforce that MLS Participants and Subscribers must not, and NorthstarMLS will not enable the ability to, filter or restrict display of MLS listings that are communicated to customers or clients based on the existence or level of compensation offered to the cooperating broker or the name of a brokerage or agent.
  8. Require compensation disclosures to sellers and prospective sellers and buyers.
  9. Require MLS Participants working with a buyer to enter into a written agreement with the buyer prior to touring a home.

2 – When will the Compensation Fields be removed from NorthstarMLS platforms?

August 15.

3 – What happens to real estate listing agreements initiated before the settlement takes effect but are not fully executed by the time the changes take effect on August 15?

Agents should check with their brokers for specific guidance. If the listing agreement instructs the listing broker to make an offer of compensation via the MLS, then the listing broker should work with the seller to amend the listing agreement before August 15 (the date of the MLS policy change) to make it clear the listing broker will not make an offer of compensation on the MLS. The seller must determine if they will permit the listing broker to make an offer of compensation outside the MLS. 

4 – What is the value of the MLS?

MLSs have always provided significant value beyond communicating offers of compensation.

NorthstarMLS impacts the real estate marketplace in the following ways:

  • Enables comprehensive marketplaces: Access to inventory and widespread advertising incentivizes local broker participation.
  • Ensures reliable data access: MLS broker marketplaces enable hubs of trusted, verified information where all participants have equitable access.
  • Creates connections: Local MLS broker marketplaces create the largest opportunity for connections between real estate agents with properties to sell and those with clients looking to buy.
  • Advances small business: Compiling housing information that is accessible to all businesses, in one place, allows competition to thrive.
  • Encourages entrepreneurship: Because of the MLS broker marketplaces, new market entrants can advance technology, consumer service, and other innovations.
  • Provides economies of Scale: Because the MLS is a cooperative resource with thousands of Participants and Subscribers it can provide technologies and support at advantageous pricing on a per-user basis.

5 – Are all other rules that were not amended still in effect?

Yes, all MLS policies will continue to be in effect and subject to enforcement by NorthstarMLS.

6 – Will there be a compensation Yes/No field?

No, there will not be a compensation Yes/No field. No information about compensation to buyers’ brokers is permitted in the MLS.

7 – Will there be a new field for pre-sale concessions (e.g., seller-offered incentives)?

No. NorthstarMLS currently allows incentives offered from the sellers to the buyers to be described in the agent or public remarks. Examples of seller-offered incentives are rate buydowns, closing costs or other allowances.

The following rules apply:

  1. Incentive must be from the seller to the buyer. No other third-party can offer the incentive.
  2. Incentive must comply with HUD guidelines/regulations. The incentive must be able to be put on the HUD statement.
  3. The incentive must not include any offer of compensation to cooperating brokers.
  4. The incentive may not be limited to or conditioned on the retention of payment to any other brokerage.
  5. If the incentive is specific to a lender or other third party, their name or company is not permitted to be stated in the remarks. You may say “using our preferred lender,” or something similar.

Last updated: July 1, 2024

Resources

NAR Settlement Information and Resources

NAR Settlement FAQs

Subscriber Agreement (effective Aug 17, 2024)

Participant Agreement (effective Aug 17, 2024)