A businessperson looks at home listings on a laptop
Illustration by Lanette Behiry/Real Estate News; Shutterstock

Why MLSs shouldn’t shy away from concessions fields 

As multiple listing services work to comply with new rules, some worry about liability risks — but including concessions could be a competitive advantage.

May 23, 2024
3 minutes

Key points:

  • MLSs associated with NAR have until Aug. 17 to remove the cooperative compensation field.
  • Some organizations are considering whether to offer a concessions field or eliminate it out of concern over future liability issues.
  • An MLS consultant believes that new concession fields, if presented correctly, will give multiple listing services an edge.

As multiple listing services scramble to update their systems ahead of this summer's rule changes, one key question is whether to offer a concessions field.

Stung by the commission lawsuits and fearful of future litigation, a significant number of MLSs are considering not offering a concession field right away, said Clint Skutchan, SVP of organized real estate at T3 Sixty. Skutchan hosted a webinar May 22 about this topic and its implications for the industry. (Note: T3 Sixty and Real Estate News share a founder, Stefan Swanepoel.)

While the NAR deal requires MLSs to remove the compensation field, seller concessions are allowed. Post-settlement, sellers can still choose to offer concessions that would cover some of the traditional buyer expenses, like repairs or closing costs — as well as offer funds that buyers could use to pay their agent. The concern among some MLSs is whether this will get them in hot water with the courts and the U.S. Department of Justice.

Allowing concessions good for consumers, MLSs

Instead of shying away from concessions fields, Skutchan suggested it's actually a consumer-centric approach that not would not only reduce liability risks, but strengthen the competitive advantage of MLSs as they adapt to changes.

With that consumer-friendly approach in mind, Skutchan has a suggestion for MLSs: Substitute the phrase "Open Offer Field" for "Concession," which he said will help promote best practices. 

Keeping the "concessions" language in place could lead to some confusion, because traditionally on MLS sites they are reported after a deal has closed. Adopting a new phrase helps listing agents indicate that sellers are open to negotiation.

"In other words, a way in which to market or convey that your seller is willing and open… to your offers as it relates to these things," Skutchan said during the webinar. "We believe that by doing this, you can reduce some of the confusion of concessions as that old use case versus the new use case."

Largest MLS is taking the lead

Some MLSs are on track to complete updates ahead of the National Association of Realtors' Aug. 17 deadline. The California Regional Multiple Listing Service, the largest MLS in the U.S., could be a model for other MLSs exploring their options. CRMLS is launching a Concessions in Price field on May 29 for its members, which will allow listing agents to market their clients' willingness to consider concessions.

That field will provide several options, depending on the sellers' comfort level, on what percentage or dollar amount they would consider offering. Importantly, the feature is nonbinding, which should ease some concerns about liability issues.

"What this becomes is a marketing of the sellers' initial willingness to consider offers from the buyer. So this is not a guarantee," Skutchan said.

For MLSs still worried about liability, an option is to create a simpler field that merely answers the question of whether the seller is willing to negotiate without getting into how much or what percentage.

On its FAQ page, CRMLS noted the popularity of concessions in closing a deal. Nearly 40% of CRMLS's closed listings had some form of concessions in 2023.

It's time to embrace 'the new way'

Including a concessions field is an important way for MLSs to stay relevant during this period of change, Skutchan said: "We think by embracing the new consumer centric model, that's going to allow us to retain that competitive advantage and discourage those off-MLS commission sharing activities."

Choosing not to move forward could lead real estate professionals to continue doing business "the old way," creating its own set of risks, he cautioned.

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