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In today’s Illinois REALTORS® Podcast, Illinois REALTORS® General Counsel Betsy Urbance explains the six key changes or clarifications to existing policies of the National Association of REALTORS® (NAR)-affiliated Multiple Listing Services (MLSs).
The changes – which were recommended by the NAR’s MLS Issues and Policies Committee – are scheduled to take effect Jan. 1, 2022, and must be implemented by March 1, 2022. NAR’s Board of Directors approved the changes at its annual conference in November. MLSs owned by associations and boards of REALTORS®, as well as those that are separately incorporated but owned by one or more boards or associations of REALTORS®, are affected by the new policies, she said.
Broadly speaking, the MLS policy changes involve:
- one data source for participants
- brokerage back office feeds
- attribution of Internet Data Exchange (IDX) data and Virtual Office Website (VOW) data feeds
- display of listing brokers’ offers to buyer brokers
- services advertised as free and
- non-filtering listings
Listen to the Illinois REALTORS® Podcast.
Full Transcript:
Jeremy Goeckner: Hello, and welcome to the IR weekly podcast. Keeping you up to date with all of the latest news in the REALTOR® world. I’m Jeremy.
Kelli Jessup: And I’m Kelli.
Jeremy Goeckner: And on today’s episode, we are welcoming Illinois REALTORS® General Counsel Betsy Urbance to talk about the latest recommendations for the MLS from the National Association of REALTORS®.
Kelli Jessup: Welcome Betsy. So your bio is way too impressive for us. Why don’t you tell our listeners a little bit about yourself?
Betsy Urbance: Okay. Some of y’all don’t know me. My name is Betsy Urbance. I’ve been blessed to be associated in some way with the REALTOR® Association here in Illinois for the past 27 years. So not quite half my life. So if you do the math, you can figure out just how old I am. And when y’all were little children going to grade school, I was answering the legal hotline up until about 2018.
Jeremy Goeckner: This is a fancy way of her saying she’s smarter than we will ever be.
Betsy Urbance: I am not saying that at all. I’m just saying I’ve been around a long, long time.
Jeremy Goeckner: Hey, I’m free to put it out there though, but Betsy, we’re talking about some stuff with the MLS and from the NAR with these new recommendations. So why don’t you give us just a broad view of what we’re talking about when we talk about MLSs from the NAR?
Betsy Urbance: OK. So what we’re talking about today, really broad view of MLSs. I’m going to get to that. We’re going, I say “um” a lot. A lot. So, if you’re listening and counting the “ums”, get online and tell me how many?
Jeremy Goeckner: Ooh, this is a fun game, yeah.
Betsy Urbance: Yeah. So there’s the challenge because I say it a lot. See. When I start listening to myself, then I catch myself. But recently at NAR’s annual meeting in San Diego, which was beautiful weather by the way, the NAR board approved a whole bunch of recommendations, but many of them focused on the MLSs and MLS issues. The recommendations came out of a lot of study from the MLS issues and policies committee and all of the policy changes, which I use the word changes pretty loosely because a lot of it is literally just clarification of existing policies. So, I’m going to explain a little bit of that later. But those all will become effective Jan. 1, 2022. And they would have to be implemented, I believe by March 1, 2022, if you are an MLS affiliated with NAR. So what does that mean? Because there are a bunch of MLSs out there, some of which are officially NAR associated and some of which are not. So, I’m just going to read to you the definition that NAR ascribes to the multiple listing service or MLS when it in relation to the National Association of REALTORS®. I’m just reading directly from their publication, “Multiple listing service and MLS means multiple listing service committees of boards and associations of REALTORS®, and it also applies to separately incorporated, multiple listing services owned by one or more boards or associations using boards and associations, interchangeably of REALTORS®.” Now we have some MLSs out there that are owned by REALTORS® or by REALTOR® associations. And they might inform themselves according to what NAR policies are, but I just wanted to make that subtle distinction before we get too far afield.
Jeremy Goeckner: Yeah, absolutely. It’s good to define the rules here.
Betsy Urbance: If anybody knows me, we’re going to get far afield.
Jeremy Goeckner: We are going to know the definitions people and we are going to know them in our hearts.
Betsy Urbance: I sidetrack myself all the time.
Jeremy Goeckner: Well, as you did say though, there were six big recommendations that came from this. And so we’re just going to dive right in here. So the first one here, what can you tell me about this policy that’s regarding one data source?
Betsy Urbance: Okay. So the MLS policy that is changed or clarified that goes into effect January 1, 2022 is that MLSs must offer a participant. What’s a participant? That is the person or entity that belongs to a particular MLS. The subscribers are the folks within the participants’ office, that also have rights to use the information. So a lot of definitions here and again, see, I promise to sidetrack myself and go far afield. So here I do, this is going to be a 17-hour podcast. But at any rate, what the policy says is look, the MLSs have to offer the participant a single data feed that would be in accordance with … and I’m essentially quoting NAR’s information here. It’d be in accordance with a participant’s licensed, authorized users. What that means, dude, I don’t know, but the participant will know, right? So it also has a provision in there in this particular single data source requirement that a designee of an MLS or of a participant, excuse me. So the participant might have an outside service provider that needs to use the MLS data for some reason. So essentially it’s the same data feed for the participant and for any legit designee of that particular participant. Makes perfect sense, right?
Kelli Jessup: Of course, got it.
Jeremy Goeckner: Yes.
Betsy Urbance: You all are nodding.
Jeremy Goeckner: I am getting there. I’m totally get it.
Kelli Jessup: We’ll be quizzed later, right?
Betsy Urbance: Yes. Yes.
Kelli Jessup: OK. Well, let’s just keep it moving here. There’s also a policy statement, which talks about brokerage back office feeds. What can you tell us about that?
Betsy Urbance: Yeah. I had to read it myself. What’s BBO mean brokerage back office feed. And the way that I interpret this is that the office receives certain information that the MLS collects that would relate to a brokerage, that a brokerage could use internally. And the participant brokerage could use this information internally. And there’s some bullet, it’s all in-house stuff, and how the brokerage office, the participant would use the information. The bullets are brokerage management systems that only expose BBO data to participant and subscribers affiliated. So essentially it’s data that only they would use. I guess I’m interpreting that. And if anyone from NAR is listening out there and needs to correct me, give me a call.
Jeremy Goeckner: This would be great, yeah, we got to have a follow up podcast. How’d we do guys?
Betsy Urbance: Yeah. Customer relationship management. The CRM data feeds that are very, very important to brokerages. Those are things that the MLS can provide to a participant, agent and brokerage productivity and ranking tools and reports that only expose BBO back office data to the participant and the subscribers affiliated with that participant. So anybody in an office, to try that, that participates in that MLS. Let’s see anything else? And then marketplace statistical analysis in reports. That stuff like in, I think I’m interpreting this correctly, but that’s where an office they’re collecting the MLS data because they want to say, I’m number one. And there are some very strict provisions about how you can do that. If in your advertising, you’re an MLS participant, and you’re saying we’re the number one office in a particular county or a particular MLS. The existing rules and policies already require you not only to advertise in a true and not misleading manner. Can you say not misleading? Misleading is that too negative?
Jeremy Goeckner: Makes sense to me.
Betsy Urbance: Yeah. But anyway, you also have to cite your data source, which is probably your MLS and you have to cite the period of time over which you’re making that claim. In essence, you have to prove that the statement that you’re making is true.
Jeremy Goeckner: Now, that’s just an onerous requirement right there. This reminds me of college. You got to cite your sources on your papers. People Wikipedia is not a source.
Betsy Urbance: That’s right.
Jeremy Goeckner: But that’s good. Now, that makes a total sense. But I tell you what, we’re on a podcast here. Let’s get a little techy. What do you say Betsy? Want to get a little techy here?
Betsy Urbance: Oh, you know me I love tech. Insert eye roll.
Jeremy Goeckner: Yeah, exactly.
Kelli Jessup: We saw the eye roll.
Jeremy Goeckner: Sad trombone and eye roll.
Betsy Urbance: As I read my notes from my yellow page, with my pen.
Jeremy Goeckner: The legal pad is back. But they did make an internet data exchange or IDX policy and a VOW policy here, which I think deals with broker attribution, right?
Betsy Urbance: It does. And what I’m going to say here is that it doesn’t really change a whole heck of a lot. I think there was maybe some misunderstanding out there that it was a really huge change, but the way that I read all the information, I don’t think it’s really that big a change. IDX policies: Let’s just say that’s the data feed in my own brain. This is how I distinguish them. IDX is the MLS data feed that is provided to the public. It is not protected by any credentials password. We used to say the word firewall. So that anything that’s going out to the public there was a requirement, there still is a requirement that attribution be given to the listing company. So the only real change is new language that says in your IDX feed, when you are making attribution to the listing company, there’s already a requirement for that. There’s already a requirement that it should be distinguishable from the rest of the content. And the addition was for the listing firm, you add the email and phone number provided by the listing participant. So, it really just gives a little more information. Let’s say somebody wants to know something about the property specifically. If it’s on your IDX feed, it’s got to be there. Now, the next one that caused, I think a little bit of consternation and maybe due to some misunderstanding, maybe not. I don’t know. Can’t read minds, I do a lot of things, but I’ve learned, I can’t read minds.
Jeremy Goeckner: I don’t believe that at all.
Betsy Urbance: Yeah. Especially my own husband, but anyway, with regard to VOW and I started this distinguish and of course sidetracked myself again. The VOW is literally Virtual Office Website. You are doing your business by means of a website as opposed to a brick and mortar office building. So now we have credentials. Now I’m a consumer, I’m walking into your virtual office, Jeremy. So I’ve got to sign on, provide my password. So I’m inside your office, I’m a customer. Maybe I’m going to become a client. So there was, and still is an option for MLSs in their VOW policies to require attribution to the listing office or the listing participant, I guess I should say, because we’re talking about folks that belong to a particular MLS. So there already existed that requirement and the keyword was option. So, if your MLS has that option, because it says here, “Requirements that MLSs may impose on the operation of VOWS.” So, you really got to check your own MLS, because some MLSs have not chosen to include the option that you have to give attribution to the listing broker. And that’s not because you dislike the listing broker or anything, but it’s because when you’ve walked into the office, if I’m walking into Jeremy’s virtual office and I’m a buyer and I’m going to be Jeremy’s buyer client, Jeremy’s going to take care of me. So I may not really need to know who the listing brokerage is, but I’m going back to the new policy or the amendment to the policy. And what that says is, if your MLS does say that you have to give attribution to the listing participant, then you also have to include the email and the phone number that’s provided by the listing. So, as you can see as a clarification it’s to my mind, at least. So I’ll disclaim to my own bizarre mind, it’s not that big a change.
Jeremy Goeckner: No, it doesn’t seem like it. I mean, just get that internet, get that contact out there man.
Betsy Urbance: I’m sure there’s some that will disagree with me, and we’ll answer your comments later.
Jeremy Goeckner: Then we can have a fight. We can have a podcast fight.
Betsy Urbance: A discussion, a discussion.
Jeremy Goeckner: A discussion. There you go.
Betsy Urbance: Kids. It’s just a discussion.
Kelli Jessup: Right. Well, we’ll keep it moving here. And on the next recommendation, what can you tell us about the display of listing broker offer of compensation part of these updates?
Betsy Urbance: Okay. I can tell you again, not an enormous change, simply a blacker line as far as what is required. Because if you’re a REALTOR® and you’ve read your REALTOR® Code of Ethics which I highly recommend.
Jeremy Goeckner: Everyone of course has.
Betsy Urbance: I highly recommend reading committing the memory, but it’s just me. But anyway, there is a requirement that the buyer broker be told how their broker is going to be paid. There’s a requirement that listing brokers tell their seller clients, how buyer brokers are going to be paid and indeed how much they’re going to be paid. So really the only thing this does is says that on the consumer data that you might give either, if you’re working with me, I’m probably going to give you a paper sheet. If I’m working with you kids, you’re probably going to send me some link.
Jeremy Goeckner: I believe digital paper link.
Betsy Urbance: Yes, yes, yes. The digital paper, which is an oxymoron.
Jeremy Goeckner: Is it though?
Betsy Urbance: Yes. Page. What does that mean? But anyway, what it says is that that has to show up that amount that the listing broker is offering to the buyer, broker must show up. There’s no required amount. I’m just going to get in a little bit of a, I mean, anybody that’s listening to this probably knows just how competitive the real estate market is. So the fact that there’s any investigation into competition in the real estate industry just blows my mind. However, while there is a rule that a listing participant offer something to a buyer broker in an effort to get the buyer broker to bring the buyer to their listing. Big broker, small broker doesn’t matter if you’re in an MLS because everybody that’s in the MLS gets to play by the rules. Anything from a buck to any flat fee, to any percentage of the purchase price, net gross, depends on the rules of your MLS. There’s absolutely no specific number that’s required. Just that something be offered.
Jeremy Goeckner: All right. OK. That makes sense. I’m liking that all of these, most of these, just like there’s just a little change, little change here, little change there, it seem daunting, but this is why it’s so great to have someone like you explain all this stuff to us. So we’re almost done here. We’ve only got two left, but let’s keep pushing through, there’s the policy statement which came which talked about services advertised as free. So what’s going on with that?
Betsy Urbance: OK. Well, I’m sure none of the buyer brokers that are listening to this podcast have ever advertised their services as free, unless they were absolutely free. But there is in Illinois, under the License Act in the REALTOR® Code of Ethics. There is exists before this policy was amended to clarify a requirement to disclose how they’re paid. So if you’re on the buyer side of the transaction and you have a buyer brokerage agreement, which I highly recommend, if you have a buyer brokerage agreement, there’s a provision in there that says you’re going to get paid something. You’re either going to get paid part of it from the listing side. And then if you don’t get the certain amount, then they’ll have to make up the difference or they’re going to pay X number of dollars to you pursuant to that agreement. If you don’t, what you have is the MLS offer of compensation. And if you’re the buyer broker, that’s the procuring cause of that sale, and you’re a participant in that MLS, you can count on that money being paid to you. So you’re going to get paid.
Jeremy Goeckner: That’s always good.
Betsy Urbance: Even though it doesn’t come directly out of the buyer’s pocketbook or their phone, or their Apple pay or whatever it is, I’m trying to be high tech here. So even though it doesn’t come out of there, the buyer broker gets compensated. So it’s a little disingenuous, just to my own legal mind to say that I’ll work for you for free. Unless of course you literally are working for you for free. So all this says is, look, unless you’re truly working for nothing and no expectation of payment, you can’t advertise this free. I personally think that is clarification of existing rule and policy.
Jeremy Goeckner: Oh, that’s good. Clarification is always good.
Betsy Urbance: Bottom line.
Kelli Jessup: There we go.
Betsy Urbance: Our REALTOR® friends love to have clarification. Love to have a black and white answer.
Jeremy Goeckner: There we go. That’s the black and white answer, right?
Betsy Urbance: No, I have never given a black and white answer.
Kelli Jessup: All right. So finally our last part here is the MLS policy, which deals a lot with non-filtering listings. What’s the run down on that recommendation?
Betsy Urbance: Okay. I sound like a broken record here because it is to my mind, again, my own twisted mind, a clarification of existing rule, at least in Illinois. In Illinois, you are the legal agent for your client, which means that you have a fiduciary like, but statutory duty to serve your client’s best interests over your own. So if you’re a buyer broker and you don’t have a buyer brokerage agreement, and the perfect listing is in the MLS to which you belong and the offer of compensation is a buck, you have a duty. If that’s the perfect listing to show to your client. In Illinois, both under your license law agency duty and as a REALTOR® under your ethical duty, I should mention since we’re talking REALTOR® stuff that you also have a duty to serve your client’s best interest over your own. You also have a duty to provide equal services to all. So why put the filters on it? Why even have them? And because I don’t think you have a really good argument if you use them, as to how you might be using them to serve your clients’ best interests. Not always lawyers never say always or never. But I think it’s a good idea here to go ahead and prohibit the filtering.
Jeremy Goeckner: Yeah, absolutely.
Betsy Urbance: I’m behind it.
Jeremy Goeckner: All these makes sense.
Kelli Jessup: Yeah, makes sense.
Jeremy Goeckner: All these make sense.
Betsy Urbance: Yeah. Y’all are nodding like you understand.
Jeremy Goeckner: I understand that perfectly. That’s great, man. You got to do what’s best for the client always. Well, Betsy, this was just, whew. We discussed so much here today. Lots of stuff. And there’s literally no one better to walk us through all of that, what I call legalese than you Betsy. So thank you once again for just bringing your expertise to the IR weekly podcast.
Betsy Urbance: I appreciate being here. Thanks for spending the time. Thanks for putting up with all my meanderings. And have a great day. Great holidays.
Jeremy Goeckner: Yeah, it is awesome. Well, I do want to everyone know if you want to read more about these MLS recommendations, you can of course always find them on the NAR website at www.nar.realtor.
Kelli Jessup: And that’s it for this week’s IR podcast. Thank you all for listening and as always give us a rating and review on your podcast app of choice. And if you want any more content, simply search for Illinois REALTORS® on your favorite social media app. We’ll see you next week.
