Space Coast MLS Policy Changes

Space Coast MLS Policy Changes Implemented Pursuant to the NAR Settlement

August 15, 2024

All mandatory changes to MLS policies, governing documents, practice changes, and implementation will take effect Thursday, August 15, 2024.


Two main changes due to the NAR Settlement that take effect August 15, 2024:

  1. Removal of Offers of Compensation in the MLS (all fields: Residential, Residential Lease, Residential Income, Land, and Commercial)
  2. Working with buyers: Required written buyer agreement in place prior to touring property.

Effective Thursday, August 15, 2024 and moving forward:

Remove Compensation icon

Removal of all compensation fields in the MLS:

  • All compensation fields will be removed from the Multiple Listing Service (MLS). You will not be permitted to communicate offers of compensation in any portion of the MLS including but not limited to: the narrative, private remarks, marketing remarks, showing services, and/or any product of the MLS. 
  • If an offer of compensation is communicated within the MLS or any of the ancillary products, the offer of communication will be removed immediately by the MLS department and you will be subject to the administrative fines as established in the Space Cost MLS Rules and Regulations. This includes but is not limited to inputting a link on the MLS directly to a listing broker's website which includes the an offer of compensation.
  • Offers of compensation are permissible, you will now communicate and facilitate those offers of compensation off the MLS.
  • Resources on Offers of Compensation: 

Video: How to communicate Offers of Compensation

Facts.realtor FAQ: Offers of Compensation #27 - #45

Written buyer agreement icon

Written Buyer Agreements:

  • MLS Participants (Brokers) and Subscribers (Agents) working with buyers will be required to have written buyer agreements prior to touring properties. 
  • Resources for Written Buyer Agreements:

More information on touring homes

Video: When you need a written buyer agreement

Written Buyer Agreements 101

Facts.realtor FAQ: Written Buyer Agreements #50 - #73

Required Consumer Disclosures on Agreements icon

Disclose, Disclose, Disclose: Required consumer disclosures

All MLS Participants (Brokers) and Subscribers (Agents) must:

  1. Disclose to prospective sellers and buyers that broker compensation is not set by law and is fully negotiable. This must be included in conspicuous language as part of the listing agreement, buyer written agreement, and pre-closing documents (if any).
  2. Conspicuously disclose in writing to sellers and obtain the seller's authority for any payments or offer of payment that the listing Participant or seller will make to another Broker, Agent, or Representative (IE Real Estate Attorney) acting for buyers. This disclosure must include the amount or rate of any such payment and be made in writing in advance of any payment or agreement to pay.

New MLS Field:  Seller Concessions Y/N icon

New MLS Field: Seller Concessions Y/N 

Seller Concessions are monetary payments that a seller agrees to contribute towards the buyers expenses and other costs a buyer is responsible for in the transaction (IE monetary assistance towards a roof replacement, carpet replacement, point buydown, etc.) Historically, concessions were available to be entered into Space Coast MLS upon closing out a listing.

At the June Board of Directors meeting, your Board of Directors approved the new MLS field Seller Concessions Y/N. This field will encourage transparency and greater communication between the listing agents, buyer's agents, and homebuyers by providing up-front information regarding concessions. This field is not intended to replace compensation in the MLS.

Seller concessions cannot be limited to or conditioned upon the retention of or payment to a cooperating broker. The buyer should state inthe purchase offer how they want the concession to be used, including compensating their broker.  Buyers may ask the seller to pay their broker's fee as a term of the purchase agreement. Again, this must be negotiated and included in the purchase offer. 

Resources on Seller Concessions:

Video: How Seller Concessions Work

Video: Requesting Buyer Broker Compensation

Florida Realtors New & Updated Forms:

June 9: Revised Buyer Broker Forms

As of July 18, 2024 these forms are uploaded in Space Coast MLS forms product Transaction Desk

June 21: New Forms 

As of June 27, 2024 these forms are uploaded in Space Coast MLS forms product Transaction Desk

  •         Form 1: Compensation Agreement - Seller to Buyer's Broker (CASB-1). This new form is a compensation arrangement in which the seller agrees to compensate the buyer's broker for procuring a buyer for a listed property. CLICK HERE TO PREVIEW CASB-1
  •         Form 2: Compensation Agreement - Seller's Broker to Buyer's Broker (CABB-1). This agreement memorializes any agreement between the brokers. The seller's broker, also known as the listing broker, to compensate the buyer's broker for the listed property. This agreement is property specific, and the arrangement between the brokers should relate to the listed property, not serve as a blanket agreement between the brokerages. CLICK HERE TO PREVIEW CABB-1
  •        Form 3: Modification to Compensation Agreement - Seller to Buyer's Broker. This form allows the parties to make changes to any material terms of the underlying compensation agreement between the seller and the buyer's broker. CLICK HERE TO PREVIEW MCA-2
  •         Form 4: Modification to Compensation Agreement - Seller's Broker to Buyer's Broker. CLICK HERE TO PREVIEW MCA-1

Resources: Please watch this 12 minute video regarding the new and updated forms

FR NOTE: Once all our forms vendors have uploaded/published the new forms, these forms will no longer be available on our website.

Coming in July:

  • Amended Buyer Broker Agreement
  • Amended Showing Agreement
  • Amended Retainer Agreement
  • Modification to Buyer Broker Agreement
  • expect releases of amended Listing Agreements and several other forms. One of those forms will address what you do with listings and buyer broker agreements that are in effect on August 17 that do not have the required language for settlement compliance.

October 1:

  • Condo riders will change October 1, not July 1 as stated previously. The change is mandated by the statue and is effective for Oct 1 not July 1. 

Properties Under Contract / Being Negotiated Before August 15:

I have an executed contract before August 15, what happens to my offer of compensation that was on the MLS? If the sales contract is executed before the MLS policy change (August 15 for Space Coast MLS) the buyer broker should be able to rely upon the offer of compensation even if the closing occurs after the date of the policy change. #36 on facts.realtor Q&A 

We are suggesting that our members print the listing sheet with the offer of compensation on August 14 for fully executed sales contracts.



I don't have a fully executed contract before August 15, what happens to my offer of compensation that was on the MLS?

If the sales contract is NOT fully executed before August 15, the offer on the 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 or by includign the offer of compensation in the sales contract. . #36 on facts.realtor Q&A

How Can I Communicate the Offer of Compensation?

Offers of compensation are a great way to get the most exposure and bring the biggest pool of potential buyers to the property.

You are still able to communicate the offer of compensation by other means outside of the MLS, this could include:

  • On the listing brokers website
  • Signs and Sign Riders
  • Social Media
  • Text, Email and Phone Calls
  • Flyers

Compensation vs. Concessions

Real Estate Commission

A real estate commission is a fee paid to real estate professionals for their services in helping to buy or sell a property. This fee is usually a percentage of the property's final sale price and is typically shared between the seller's broker and the buyer's broker.

The commission covers various services provided by the real estate professional resulting in the closing of a real estate transaction. Examples of services but by no means limited to: marketing the property, negotiating the sale, scheduling and facilitating all appointments including photographers, inspections and appraisals, handling the paperwork, and guiding the customer or client through the buying or selling process.



Real Estate Concession

A real estate concession is a benefit, discount, or payment offered by the seller (or sometimes the buyer) that enables the buyer to complete the purchase.

Concessions can take many forms and are typically used to incentivize the deal, making it more attractive to the buyer. 

Concessions can cover closing costs, offering repair credits, providing home warranties, inspections, and buyer broker fees. 

Concessions can be a benefit that enables the buyer to complete the purchase of a property. Sellers work with their listing agent to consider and decide concessions when listing a property and or negotiating an offer. 

Concessions are commonly negotiated during the offer process. During the offer process buyers with their buyer's agent may request concessions and sellers can agree, counter, or decline the request.


Key Differences

Commission: A professional fee paid for services rendered by licensed real estate professionals.

Concession: An incentive, benefit, or payment offered to facilitate the sale which can take various forms.



Commission: Compensates real estate professionals for their work in the closing of a real estate transaction.

Concession: Provides incentives or added value that could enable the buyer to complete the purchase of a property.



Commission: Negotiated between the seller and the listing broker and/or the buyer and the buyers broker and paid at the time of closing.

Concession: Negotiated between the seller and the buyer, affecting the net amount the seller receives and the buyer pays.

Fines for Non-Compliance of the Mandatory Policy Changes

Section 22.16 – Fine for communicating offers of compensation in the MLS, any Ancillary Products, or Association Platforms: 

For a first violation, an administrative fine of $1,000.00 and required to attend the MLS sponsored 2-hour class of instructions on the MLS Rules and Regulations within 90 days of notification by the MLS for the first violation. If after 90 days, class has not been taken, an additional fine equal to that of the original fine will be assessed monthly until class is taken. A second violation will result in a $1,500.00 fine to each the MLS Subscriber (agent) and the MLS Participant (Broker).

Any subsequent violations by the same MLS Participant (Broker) acting as a listing agent, or MLS Subscriber (Agent) for listing of compensation in the MLS, the MLS Participant (Broker) and MLS Subscriber (Agent), will each be assessed an administrative fine of $3,000.00.

 

Section 22.17 – Fine for failure to have a written buyer agreement:

Failure to provide the written Buyer Agreement, when requested by MLS Staff, in 1 business day, will result in an administrative fine of $250. An additional charge of $500 will be assessed if not provided within 5 business days. Additionally, the buyer’s agent is required to attend the MLS sponsored 2-hour course of instruction on the MLS Rules and Regulations within 90 days of notification by the MLS. If after 90 days the class has not been taken, an additional fine equal to that of the original fine will be assessed monthly until the class is taken.

REALTOR Code of Ethics

Article 1: Protect/Promote the Interests of Clients

Article 3: Ascertain Compensation

Article 12: Be honest and Truthful in Communications

Mediation and Arbitration of commission disputes still applies (Article 17). Procuring cause disputes may still arise and be arbitrated.

Settlement Class Notice and Timeline 

A class action notice will be sent out on or after August 17 to anyone who has sold a home that was listed on an MLS anywhere in the United States where commission was paid to any brokerage in connection with the sale of a home.

So long as you are a REALTOR member and fall under the settlement coverage terms by the date of class notice, you will be considered a “released party” under the settlement terms. You will not be covered by the settlement regardless of prior membership length, if you resign your membership, if your membership is terminated, or if your membership becomes inactive prior to the date of class notice (no earlier than August 17, 2024).  Class Action Website Here

 

Settlement Timeline:

March 15, 2024: Settlement agreement signed

March 22, 2024: NAR filed notice of the settlement and withdrew pending motions

April 23, 2024: Preliminary approval granted from the court.

June 18, 2024: opt in deadline

REALTOR owned MLSs

Brokerages with transactions of $2bil + and Non-Realtor owned MLSs

August 17, 2024:

Earliest date of class notice: so long as you are a REALTOR member by the date of class notice and fall under the settlement coverage terms you will be considered a “released party” under the settlement terms.

Deadline for Realtor owned MLSs to implement mandatory policy changes.

September: Anticipated motion in support of final approval

November 26, 2024: Hearing for final approval