The 2020 Nar-DoJ Agreement Regarding MLS Rules: What You Need to Know
In November 2020, the National Association of Realtors (NAR) reached an agreement with the Department of Justice (DoJ) regarding certain rules related to the Multiple Listing Service (MLS). The MLS is a database of property listings used by real estate agents and brokers to share information with each other and facilitate the buying and selling of properties. The Nar-DoJ agreement aims to increase competition in the real estate industry and provide more choices for consumers. Here`s what you need to know about the agreement and its implications for the industry.
What are the specific rules that are affected by the agreement?
The agreement addresses three rules related to the MLS. The first rule prohibits agents from marketing properties that are not listed on the MLS. The second rule requires brokers to offer compensation to other brokers who bring a buyer for a property. The third rule prohibits brokers from withholding listings from the MLS.
Why were these rules problematic?
According to the DoJ, these rules were seen as anti-competitive because they limited consumer choice and prevented new business models from entering the market. For example, if agents were not allowed to market properties that were not listed on the MLS, they could not offer alternative listing services that may have been more beneficial for sellers. Similarly, if brokers were required to offer compensation to other brokers regardless of the level of service they provided, it could limit the ability of new business models to enter the market.
What changes will be made as a result of the agreement?
Under the agreement, NAR will make several changes to these rules. First, agents will be able to market properties that are not listed on the MLS, giving them more flexibility to offer alternative listing services. Second, brokers will have more control over the level of compensation they offer to other brokers, allowing them to compete based on the level of service they provide. Finally, brokers will have more flexibility to withhold listings from the MLS, which could allow for the development of new business models that are not currently possible.
What are the potential implications of these changes?
The changes to the MLS rules could have several implications for the real estate industry. For one, they could lead to more competition in the market, which could benefit consumers through lower costs and more choices. They could also encourage innovation in the industry by allowing for the development of new business models that were previously prohibited. Finally, they could result in a more diverse range of listing services and compensation structures, which could benefit both agents and brokers.
Overall, the Nar-DoJ agreement regarding MLS rules represents an important development for the real estate industry. By increasing competition and providing more choices for consumers, it has the potential to benefit all stakeholders in the market. Real estate agents and brokers should stay informed about these changes and consider how they can adapt to take advantage of new opportunities in the industry.
