FAQ: Changes to DMLS from the NAR Settlement August 6th, 2024 Follow
Questions will be updated as more information becomes available.
Please reference this document or NCR can be reached through their legal hotline at
(336) 294-1415 legalhotline@ncrealtors.org or their tech hotline at (877) 573-5612 should you
have any additional questions not listed within this document.
- Compensation fields were removed from the MLS on August 6th.
- Two new rules coming soon:
- Signed Buyer Agreement (Section 2.2)
- Offering (Section 5.1), or Reporting Compensation or Commission (Section 5.2)
At the August 13th DMLS Board of Directors meeting, new Rules accompanying the NAR Settlement will be adopted. While the changes are proposed until then, they are anticipated to be as follows:
The first new rule requires a signed Buyer Agreement (Section 2.2) under most conditions. The second prohibits Offering (Section 5.2), or Reporting Commission (Section 5.2) or Compensation on the MLS. Violation of either rule will result in a Category III violation. From the morning of August 17th until the morning of December 1, 2024 Doorify will focus on education and helping Subscribers adjust. During this period, First Offenses will result in a Notification with a Warning. Second and subsequent offenses will follow existing Category III guidelines described in the Fee Schedule below.
Note: When DMLS staff discovers a violation, staff will place the listing on administrative hold, removing it from MLS, until the violation is corrected.
Data Integrity Fee Schedule | ||||
---|---|---|---|---|
Category I | Category II | Category III | Category IV | |
Fines | None |
IIa – None – First offense IIa – Additional violations incur Minimum $100. Not to exceed $500. IIb - Minimum $100 Not to exceed $500 |
Minimum $500 2nd $1000-7 day suspension 3rd $2000-30 day suspension 4th Potential suspension from DMLS for a period of one year. Reinstatement will require the approval of the DMLS Board of Directors. |
Minimum $1500 2nd $3000 3rd Expelled from DMLS for a period of one year. Reinstatement will require the approval of the DMLS Board of Directors. |
Non Compliance (If the Violation is not corrected within 2 business days excluding weekends and holidays) |
$100 | $100 | N/A | N/A |
Continued Non Compliance (if applicable) |
$100 for every 2 business days not to exceed $500. |
$100 for every 2 business days not to exceed $500. |
$100 for every 1 business days not to exceed $500. |
N/A |
Non-Payment Failure to pay a fine within 30 days of original invoice date |
Subscriber suspended until all fines are paid. |
Subscriber suspended until all fines are paid. |
Subscriber suspended until all fines are paid. |
Subscriber suspended until all fines are paid. |
Non-Payment Failure to pay a fine within 60 days of original invoice date |
DMLS service for the OFFICE suspended until all fines are paid. |
DMLS service for the OFFICE suspended until all fines are paid. |
DMLS service for the OFFICE suspended until all fines are paid. |
DMLS service for the OFFICE suspended until all fines are paid. |
Non-Payment Failure to pay a fine within 90 days of original invoice date |
DMLS service for the OFFICE terminated. |
DMLS service for the OFFICE terminated. |
DMLS service for the OFFICE terminated. |
DMLS service for the OFFICE terminated. |
View our 7/17/24 NAR Settlement town hall presentation here.
https://drive.google.com/file/d/1xYcyK-7TZXln72MSYUGRkMBqoMho98Tc/view?usp=sharing
To access the recording, enter the passcode: 19AsXR0%
On Tuesday, August 6th, 2024 compensation fields will be removed from the MLS.
What is this about?
Doorify MLS, along with hundreds of other NAR-affiliated MLSs, has entered into a settlement agreement to resolve several lawsuits around the country relating to offers of compensation from listing brokers to buyers’ brokers. There are two key practice changes: First, listing brokers will no longer be allowed to communicate offers of compensation (whether from the listing broker or from the seller) to buyers’ brokers through MLS, though they are free to make such offers via other means. Second, a broker must enter a written agreement with any prospective buyer before showing any MLS listing to that buyer, though there are some exceptions. More information is available from NAR here.
What will happen?
On Tuesday August 6th, Doorify MLS will remove all compensation fields, and rules associated with submitting an offer of compensation via the MLS. Additionally, Doorify is removing compensation data from all MLS provided services including Listing Input forms and screens, data feeds, and MLS reports and search forms. New rules will go into effect on August 6.
What is the impact of the August 6 changes?
Once removed Participants and Subscribers will not have access to these data elements. After August 6th, Participants are prohibited from using the MLS to make any offer of compensation (whether the compensation would be from the listing broker or the seller) to other participants on listings filed with the MLS.
Buyers Agreements
Doorify MLS will require any participant working with a buyer to enter a written agreement before providing a tour of a listing in the MLS. In enforcing this rule, DMLS will investigate reported violations and verify documentation of compliance.
How does the listing broker communicate compensation for buyer brokers?
Offers of compensation are an option for consumers to pursue off-MLS. Brokers and sellers may negotiate the compensation paid to the buyer representative on a case-by-case basis. The negotiated cooperative compensation can be reflected in the transaction documents (e.g., agency agreement, compensation agreement, etc.). Broker compensation is negotiable and should always be negotiated between agents and the consumers they represent.
How can MLS data be used/displayed?
Doorify MLS will not support any data use, effort, or attempt to create any platform for brokers to exchange offers of compensation (i.e., where offers of compensation are extended to multiple buyer brokers). Participants and MLS vendors are not permitted to use MLS data feeds to establish any such compensation platform. Violation of these rules will result in revocation of data access. Participants may include compensation information on their own listings, so long as no other brokers’ offers of compensation are displayed.
Can an offer of compensation be described in the remarks field in the MLS?
No. Any offer of compensation (whether the compensation would be from the listing broker or the seller) communicated anywhere in the MLS is prohibited, including any field, photo, or attachment.
Are there new forms?
Yes. Changes to a number of residential, commercial, auction, and property management forms in the NC REALTORS® forms library were effective July 1. These forms have been reviewed by legal counsel to be in compliance with NC law and the practice changes required under the recent NAR Settlement Agreement. A list of the forms that changed and a detailed summary of those changes are now available via the links below. You can find all updated forms on ncrealtors.org in the Forms Library. Access the library.
- Summary of Residential Forms Changes
- Summary of Auction Forms Changes
- Summary of Property Management Forms Changes
- Summary of Commercial Forms Changes
Can I put compensation in the remarks?
No. Compensation may not be posted anywhere on the MLS.
What about the historical data? Will we lose all of that information?
Yes. The MLS is required to archive that data so that it is not accessible.
Aren’t Compensation, Concessions, and Incentives all the same? So if we can put incentives in the agent's remarks, why can’t we put compensation in there too?
There is a difference between compensation and concessions. Seller Concessions are specifically allowed by the Proposed Settlement if specified in dollars on a case-by-case basis.
Am I ok to add compensation amounts in the Open House comments fields to let agents know about the % they can expect?
No, you cannot put percent compensation anywhere on the MLS.
Will we have a field where we can enter pre-concessions like some of the other MLSes?
Initially, no. DMLS may add On Market Seller Concessions as specified in the Proposed Settlement, or something similar, at some point but it will likely not happen on August 6th. Longleaf has elected to add a “Seller Concessions Offered: yes or no” checkbox. DMLS plans to display that field for listings coming from the Longleaf Pines MLS Data Sharing partnership.
Do you want us to upload the WWREA forms and make them private?
No. That is not necessary. DMLS is required under the Proposed Settlement to verify that Subscribers are entering into these agreements to maintain compliance. DMLS has adopted a policy of Random Audits or spot checks to enforce and inform compliance. So, there is no need to upload the document unless it is required as part of this compliance assurance process.
When you are doing spot checks, will you ask for Buyer Agency Agreements to be emailed?
DMLS will send you an email with instructions on how to submit it to us, probably through a web form.
Can we show an unrepresented buyer a couple houses, and then ask them to sign a Buyer’s Agency Agreement?
Unfortunately, the answer is no but there is another way. If you consider using the Non-Exclusive Buyer Agents Agreement, and you specify those properties, and a short period of time during which you would represent them for those properties, that arrangement would give you an opportunity to earn that business. But watch out, there are agreements circulating online that do not include a full Buyer Agency Agreement, and some are not in compliance with the North Carolina Real Estate Commission. Always discuss the use of any forms with your Broker.
If we are independent and our own broker, is there a help line or resource number, other than the NAR legal hotline, to help with confusion/questions?
NCR can be reached through their legal hotline at (336) 294-1415
legal@ncrealtors.org or their tech hotline at (877) 573-5612.
Will the same rules apply to the new construction purchase transaction?
Yes regarding buyer agency agreements. Keep in mind many builders onsite agents have never represented buyers and that will likely continue.
Are these compensation fields removed only for residential listings?
No, the Settlement applies to all Property Classes including Rental.
How will you display and how we should use and communicate "Seller Concessions"?
You may communicate Seller Concessions for On Market Properties in Private Comments. Do not use percentages, use a dollar amount.
Will the new rule to have a written buyer agency agreement before a showing prevent “trying out an agent” for buyers? Some buyers want to see a few properties before they will commit to an exclusive agency.
No, this does not prevent that at all. Consider using the Non Exclusive Buyer’s Agreement for short term situations like this. It can even be property specific.
Will appraisers have any access to this data?
Appraiser access will not change.
Can we advertise compensation on our social media accounts? What about virtual tours?
Yes, you may advertise compensation on social media accounts provided that the link is not coming directly from the MLS. You may do so for virtual tours as well as long as it is not the same virtual tour that is on the MLS.
How will DMLS investigate reported violations?
DMLS has to prove to regulators when audited that the company has strict rules and that we enforce them. Automated processes and spot checks will be used to select Showings for review by DMLS’s existing Data Integrity staff.
Will there be a new blank compensation agreement form available in forms?
It is in Zip Forms and on NCR’s website. https://www.ncrealtors.org/legal-ethics/forms-contracts/document-library/
Can we have the offer of compensation on our websites and the new compensation agreement on our personal/company websites, or social media accounts?
Yes provided there are no offers of compensation from any other firm on the same site.
Can we use the compensation form in zip forms?
Yes. The revised form is in ZipForms.
Can a compensation document be uploaded to the document section of Paragon?
No. Compensation cannot appear in the MLS after August 17th.
Can a seller agree to pay one buyer’s agent one amount, and another buyer’s agent another amount? What is DMLS doing to protect buyers and their agents for this scenario?
That can happen but DMLS no longer records or reports offers of compensation. Sellers choose what they will accept within the constraints of each offer. Agents should advise Sellers to evaluate each offer based on its merits and not to violate Fair Housing laws.
Does the 220 have to be signed by listing firms before showing the property?
No. I would encourage you to have it signed before submitting an offer or a contract may get signed with no compensation being provided.
Can form 220, Offer of Compensation, be included in MLS documents?
No.
Can you announce the actual compensation in flyers in the home, or just that you are offering compensation to the buyer’s agent?
Yes, this is permissible. It's like putting the commission on your website. If it is on the Listing Detail Page, not searchable, and is one click off of the Listing Detail Page, you should be safe.
Is it correct that BEFORE we send an offer to the listing firm, we have to send the compensation agreement FIRST and get signatures?
Talk to your Broker about this, but it is generally recommended that you have a compensation agreement in place before sending an offer.
Is it OK to leave information at each listing that states the amount of compensation being offered to the buyer’s agent?
Yes.
Are we allowed to put seller concessions in the remarks section?
Yes, in Private not Public Remarks, and it should be a dollar amount and not a percentage, and should not be described as compensation or commission.
If we currently have active written buyer agency agreements with clients, how do we adhere to future requirements?
There is a new form that was created by the Forms Committee (Form 715), and we expect that to be a short term form to be used. The purpose is to alert the buyer or the seller that there has been a change in the rules.
Is DMLS going to go through the existing listings that have statements offering compensation and remove them?
The display field will disappear, so all offers that exist today will not be visible.
Can we use the remarks field in Showing Time to display compensation?
No.
As a buyer agent, can we create a document for the listing agent and seller to sign to confirm they will pay the stated commission they have stated?
Yes, look at form 220 from NCR standard forms as a great option.
Can form 220 be prepared and signed by the seller and the listing agent when the property is listed?
Yes.
Would it be acceptable to have a sign that says "Buyer Agent Commission Offered" or “Buyer Agent Friendly”outside the home?
Yes. You also could put it in the house if you would like.
How can we ask if there is a concession?
Contact the Listing Broker, or look at their website. They are allowed to post any On Market Seller Concessions on their site, with some restrictions.