NAR SETTLEMENT

Compensation fields will be removed from the MLS in data-feeds and other ARMLS products on August 1, 2024 for all property classes (including rentals). Concession fields will remain at the end of the transaction as closing information. Commission information, including referral fees, may not be added to MLS in any form: remarks, photos, documents, or any field.

Please see ARMLS rule 12.1 and the Inappropriate Language Policy “as ARMLS shall not publish any Listing that includes an offer of compensation, nor shall ARMLS include general invitations by Listing Participants or their sellers to Subscribers to discuss offers of compensation”.

Hinting, using coded language and/or replacing commission and referral fees terms with analogs (cookies, bananas, etc.) is not allowed in any field, including remarks. Furthermore, indicating or signaling a seller is willing make an offer of commission is not allowed. Examples:

• “Seller is prepared to offer bananas”
• “Seller is Agent Friendly”
• “Call Agent for BB”
• “Please use SCA”

Hinting in any field could create steering in the MLS, where agents might only show properties that indicate an agent commission is offered in the MLS. Please see ARMLS rule 12.1 and the Inappropriate Language Policy as “ARMLS shall not publish any Listing that includes an offer of compensation, nor shall ARMLS include general invitations by Listing Participants or their sellers to Subscribers to discuss offers of compensation”.

From NAR: “Offers of compensation will continue to be an option consumers can pursue off-MLS through negotiation and consultation with real estate professionals. The types of compensation available for buyer brokers would continue to take multiple forms, depending on broker-consumer negotiations, including but not limited to:

• Fixed-fee commission paid directly by consumers
• Concession from the seller
• Portion of the listing broker’s compensation
• Compensation would continue to be negotiable and should always be negotiated
  between agents and the consumers they serve.“

ARMLS will not collect buyer agreements, however, ARMLS may ask for agreements at any time. This requirement only applies to Residential For-Sale. ARMLS does not provide or require a specific agreement form.

From NAR: “The written agreement must include:

1. A specific and conspicuous disclosure of the amount or rate of compensation the
   Participant will receive or how this amount will be determined, to the extent that the
   Participant will receive compensation from any source.
2. The amount of compensation in a manner that is objectively ascertainable and not
   open-ended.
3. A term that prohibits the Participant from receiving compensation for brokerage
   services from any source that exceeds the amount or rate agreed to in the agreement
   with the buyer; and
4. A conspicuous statement that broker fees and commissions are not set by law and are
   fully negotiable.“

From NAR:
“MLS Participants working with sellers must disclose in conspicuous language that broker
commissions are not set by law and are fully negotiable.

MLS Participants must include the disclosure in the listing agreement, if the listing agreement
is not a government-specified form. If the listing agreement is a government-specified form, a
separate disclosure would satisfy the requirement“

From NAR – “Prohibit the use of MLS data or data feeds to directly or indirectly establish or maintain a platform of offers of compensation from multiple brokers or other buyer representatives.  Such use must result with an MLS terminating the Participant’s access to any MLS data and data feeds.“

You may display your (entire brokerage) commissions on your website. Since ARMLS will no longer have your commission information, your IDX vendor or webmaster may need to assist you, if you choose to display this information.

From NAR: “MLS Participants may augment MLS data or data feeds with offers of compensation to buyer brokers or other buyer representatives for only listings of their own brokerage.” ARMLS defines a brokerage as all offices with the same Designated MLS Participant (Broker).

As an MLS owned by REALTOR® associations, ARMLS was compelled to opt-in to help reduce future of liability for our subscribers and MLS. Ultimately this was the best path forward. NAR says: “NAR continues to deny any wrongdoing: NAR has long maintained—and we continue to believe—that cooperative compensation and NAR’s current policies are good things that benefit buyers and sellers. They promote access to property ownership, particularly for lower- and middle-income buyers who can have a difficult-enough time saving for a down payment. With this settlement, NAR is confident it and its members can still achieve all those goals.“

The new rules and practice changes apply to all ARMLS subscribers regardless of trade affiliations or memberships.

Yes. Future liability is not covered. Failure to comply with the settlement terms can create future liability for agents/brokers and the MLS.

NAR says: “A listing broker (or agent) should inform the seller about costs the buyer will incur, how the buyer might react to those costs, and how the seller can market a house considering the buyer’s costs; but a listing broker must not tell a seller that a broker (or agent) will steer buyers based on the amount that broker (or agent) is compensated.“

ARMLS has decided to apply the prohibition of commission information to all property classes, including rentals and land.

While most of the terms of the settlement are universal, some items have been left to the local MLS to decide.

ARMLS chose August 1, 2024 to give subscribers more time to make changes prior to the August 17th class certification by the courts.

The ownership of a commission aggregation website is immaterial to the prohibition of the practice. MLS subscribers may not engage in this activity.

From NAR – “(MLSs Must) Prohibit the use of MLS data or data feeds to directly or indirectly establish or maintain a platform of offers of compensation from multiple brokers or other buyer representatives.  Such use must result with an MLS terminating the Participant’s access to any MLS data and data feeds.“

ARMLS is holding several broker events across the Valley (Email Brand@ARMLS.com for more details). Agents should work with their brokers on these changes first. Since the majority of changes require broker direction, ARMLS will not be holding agent training sessions. AAR also has several classes coming up.

No, commission information, including referral fees, may not be added in any MLS system. See FAQ about displaying your commission on your website.

Remember: MLS data – directly or indirectly, cannot be used to compile commission information from other brokerages.

No, website addresses and URLS are not allowed in public remarks. However, website addresses are allowed in private or semi-private remarks if it is related to the listed property and the website does not lead directly to compensation information.

Website addresses are allowed in private or semi-private remarks if it is related to the listed property and the website does not lead directly to compensation information. However, website addresses and URLS are not allowed in public remarks.

Hinting, using coded language and/or replacing commission and referral fees terms with analogs (cookies, bananas, etc.) is not allowed in any field, including remarks. Furthermore, indicating or signaling a seller is willing make an offer of commission is not allowed. Examples:

• “Seller is prepared to offer bananas”
• “Seller is Agent Friendly”
• “Call Agent for BB”
• “Please use SCA”

Hinting in any field could create steering in the MLS, where agents might only show properties that indicate an agent commission is offered in the MLS. Please see ARMLS rule 12.1 and the Inappropriate Language Policy as “ARMLS shall not publish any Listing that includes an offer of compensation, nor shall ARMLS include general invitations by Listing Participants or their sellers to Subscribers to discuss offers of compensation”.

Yes, concession information may still be added in the public remarks. NAR says:

• “…must ensure that the seller concessions are not limited to or conditioned upon the
  retention of or payment to a cooperating broker, buyer broker, or other buyer representative.
• As a general matter, seller concessions usually aren’t binding until they are established in an
  executed contract such as a listing agreement or a purchase contract.”

You may use the Public Remarks field to communicate concessions prior to closing. The dedicated Concession fields will remain as closing information in the listing.

NAR says:

• “…must ensure that the seller concessions are not limited to or conditioned upon the
  retention of or payment to a cooperating broker, buyer broker, or other buyer representative.
• As a general matter, seller concessions usually aren’t binding until they are established in an
  executed contract such as a listing agreement or a purchase contract.”

No commission information, including that the seller is willing to make an offer to the buyer broker, even without using numbers or percentages, may be in any MLS field. Please see ARMLS rule 12.1 and the Inappropriate Language Policy as “ARMLS shall not publish any Listing that includes an offer of compensation, nor shall ARMLS include general invitations by Listing Participants or their sellers to Subscribers to discuss offers of compensation”.

Sold price does not change – it should always be entered as the gross price the home sold for.

While the removal and prohibitions on commissions apply to all property types, the written buyer agreement requirement only applies to Residential For-Sale listings.

If an MLS subscriber hosts an open house or provides access to a property, on behalf of the seller, to an unrepresented buyer, they are generally not required to enter into a written agreement with those buyers touring the home. NAR says:

“No. In this case, since the MLS Participant is only working for the seller, and not the buyer, the MLS Participant does not need to enter into a written agreement with the buyer.“

The Arizona Association of REALTORS® plans to publish their new forms on August 1, 2024. AAR forms will be posted online and in TransactionDesk when available. Drafts of the forms have been published here: https://www.aaronline.com/arizonabestpractices.

A written agreement is required to show a property, however, ARMLS has no requirement that a specific form must be used. See your broker for their instructions as they may have requirements. NAR Says:

“The written agreement must include:

1. A specific and conspicuous disclosure of the amount or rate of compensation the
   Participant will receive or how this amount will be determined, to the extent that the
   Participant will receive compensation from any source.
2. The amount of compensation in a manner that is objectively ascertainable and not
   open-ended.
3. A term that prohibits the Participant from receiving compensation for brokerage
   services from any source that exceeds the amount or rate agreed to in the agreement
   with the buyer; and
4. A conspicuous statement that broker fees and commissions are not set by law and are
   fully negotiable.“

NAR Says:

“If the listing agreement instructs the listing broker to make an offer of compensation without reference to an MLS, no change to the listing agreement is needed, as the listing broker can comply with that instruction without violating the MLS policy change.

But if the listing agreement specifies that offers of compensation be made on an MLS then the listing broker should work with the seller to amend the listing agreement before the MLS policy change is implemented, to make it clear the listing broker will not make an offer of compensation on an MLS and to determine whether the seller instructs the listing broker to make an offer of compensation outside of an MLS.“

NAR Says:

“If the sales contract is executed before the MLS policy change, the buyer broker should be able to rely upon the offer of compensation even if closing occurs after the date of the policy change.

But if a sales contract is not executed before the date the participant’s MLS implements the policy changes, the offer on an MLS will not be valid and buyers and buyer brokers may wish to protect themselves in writing with the listing broker or seller through a broker agreement or by including the offer of compensation in the sales contract.“

In 2021, ARMLS sunset their Property Class 1 and 2 Exclusive Right & Exclusive Agency forms. ARMLS has elected to further sunset their ER and EA forms for Property Classes 4, 5, 6 and 7 due to low usage.