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New Year, New NAR Policy Updates

by Hank Lerner, Esq. on

Each year brings at least a few changes to various NAR policies, and 2022 introduces several important changes to Professional Standards and MLS policies that you’ll need to know about (see NAR’s website for more complete information on all the changes).

All Professional Standards changes are in effect as of Jan. 1, so they’re effective now. MLS policy changes are effective as of Jan. 1, but local Realtor®-owned MLSs have until March 1 to adopt the changes into their local rules. Any questions about the timeline for local adoption should be directed to your local MLS.

Professional Standards: Did you… Really?

A few years ago, Standard of Practice 1-7 was amended to say that listing agents, if asked in writing, must provide buyer agents with “a written affirmation” that their offer has been presented to the seller or that the seller has waived submission. The Broker’s Request for Affirmation form was created to give the buyer agent a convenient way to ask and for the listing agent to reply.

For 2022, there is a companion change to Standard of Practice 1-8, which puts a similar duty on a buyer agent to affirm that a counteroffer has been presented to their buyer. PAR Standard Forms Oversight Committee will be looking at revisions to Form BRFA to accommodate that change.

Professional Standards: Free falling

Standard of Practice 12-1 has long regulated how Realtors® can use the term “free,” but it’s been confusing and even somewhat contradictory. A newly rewritten Standard of Practice provides a much cleaner bright-line rule for your advertising:

“Realtors® must not represent that their brokerage services to a client or customer are free or available at no cost to their clients, unless the Realtor® will receive no financial compensation from any source for those services.

This reworked rule is primarily directed at scenarios in which brokers or agents might suggest to clients that their buyer agency services are “free,” when those brokerages are actually collecting cooperating compensation from the listing broker. There may be scenarios in which Realtors® can still advertise “free” services – but they must actually be free and not paid for directly or indirectly by anyone else. For example, an agent could still advertise a “free CMA” to prospective sellers if the agent’s practice is to perform and deliver the CMA for no cost regardless of whether the seller lists with them and to do so without compensation from any other source. (Note: A similar policy change was also made to MLS rules.)

Professional Standards: Hate has no place here

In 2020, NAR passed Standard of Practice 10-5, which prohibited the use of harassing speech, hate speech, epithets and slurs by Realtors®. There are now six new case interpretations (cases 10-6 through 10-11) that try to give some additional context to that rule.

Case interpretations are scenarios built by NAR to illustrate how the code should be applied to certain types of fact patterns. Though they sometimes seem artificial or manufactured, several of the new cases were built using actual member behavior from just the past few years. So when reading them, instead of thinking “No Realtor® would do that,” you may want to ask yourself “Why would a Realtor® do that?”

Professional Standards: You have the right to Zoom your accuser

The last few years have brought a lot of activities from the real world into the virtual world and the professional standards hearing process has been part of this transition. Based on these successes over the past two years, a raft of technical changes make virtual hearings a permanent option into the future.

MLS: Property address

After a surprisingly hard-fought debate, the MLS rules now require that agents must include a property address for each listing and that the address be available to all other participants and subscribers. Many MLSs already required this information, so it may not be anything new in your area.

MLS: Show Me the money (maybe)

The rules have always required a listing broker to make some sort of offer of cooperating compensation to brokers who bring a buyer, but the field with that information has been considered as confidential and therefore could not be displayed on a broker’s or agent’s website. The rules now define this as a non-confidential field, with the requirement that MLSs display the field on any of their own consumer-facing websites, along with the option (but not the obligation) for brokers and agents to display that field on their own IDX websites. Any such displays must also include a required disclaimer noting that the offer is only valid for other participants in the MLS where the listing is filed.

A related rule now says that the MLS cannot permit brokers and agents to filter or restrict listings that are visible to the public based on the amount of cooperating compensation or the name of the listing broker or agent.

As explained by NAR’s 2021 president, both these changes, along with the limitations on advertising “free” services, are intended to improve consumer transparency so buyers and sellers can be more informed about the financial aspects of their transactions.

MLS: I’ve got your number

IDX website displays are now required to include not only the name of the listing firm, but also the “email or phone number provided by the listing participant.” This is part of the continuing evolution of IDX display to balance the creativity of those with IDX displays with the rights of the listing brokers (without whom there would be no listings to display). The specific implementation of this rule (i.e., how the broker provides this information to the MLS and how it gets distributed through the data feed) will be handled by each MLS individually. If you have an IDX site, it’s not too soon to contact your vendor to be sure that they’re on top of the changes and that your site will be able to comply as local rules and procedures are implemented.

Topics

Code of Ethics MLS Professional Standards
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