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Northwest MLS will not join NAR settlement 

The organization is the first non-NAR MLS to announce its intentions, and it says keeping the compensation field provides more transparency for consumers.

May 28, 2024
4 minutes

Key points:

  • NWMLS is a multiple listing service with more than 35,000 members covering most of Washington state and part of Oregon.
  • It is not affiliated with NAR, so it was excluded from the NAR deal — but could have paid into a settlement fund and removed the compensation field from its website.
  • The organization believes the elimination of the field restrains seller choice and puts buyers at a disadvantage.

A large multiple listing service has decided not to opt in to the NAR settlement deal — and will continue to provide an updated version of the compensation field for its members.

Northwest MLS, which covers most of Washington state and part of Oregon, announced that it will not take part in the $418 million agreement reached by the National Association of Realtors in March. The decision was made by the organization's board of directors.

Because NWMLS is owned by member real estate firms and not affiliated with NAR, it was given the option to pay into a settlement fund and abide by the rule changes coming out of the settlement — most notably for MLSs, the removal of the offer of compensation field. With more than 35,000 members in 2023, NWMLS would have paid around $3.5 million into the settlement fund if it chose to opt in. 

Instead, the MLS plans to make a few changes to its compensation field by mid-August "to ensure that sellers are aware of an option that currently exists when listing a property for sale." 

Specifically, NWMLS said it will clarify that sellers do not have to offer a specific compensation amount to the buyer agent, but if they are open to such an arrangement, they can ask the buyer to include a compensation request in their offer, which would then be open to negotiation.

Why NWMLS thinks the new rules hurt consumers

In announcing its decision, the organization said the NAR settlement "eliminates compensation transparency for buyers and restrains sellers' choice by prohibiting sellers from making offers of compensation through the MLS," a change that is "a step in the wrong direction and detrimental to consumers and brokers alike."

The organization said that removing the compensation field will push consumers and brokers to make secret deals, inviting "deceptive practices, discrimination and unfair housing," which could be especially detrimental to first-time buyers and others who are already disadvantaged. 

Charting its own course

The organization said in a press release that its "procedures are facilitated by progressive rules and forms," and "instead of restricting consumer choice, NWMLS has seized every opportunity to enhance the quality of real estate brokerage services in the Northwest and will continue to do so."

Since it is not affiliated with NAR, NWMLS has been able to establish its own rules around buyer agent compensation. In 2019, it eliminated the requirement that a seller offer compensation to the buyer's broker. 

It made further changes in 2022, requiring that any compensation to the buyer agent be set and paid by the seller, not the listing broker. The commission offer is also included on the first page of the purchase and sale agreement, so compensation is clearly disclosed up front, with the understanding that the buyer and their agent could negotiate.

Washington state also made legislative changes that became effective this year. The state's new agency law requires buyer brokers to enter into a written services agreement with their client at the beginning of the parties' relationship.

NWMLS members and consumers have been adapting well to the changes, said Justin Haag, CEO of the nonprofit organization. 

"We expect business practices to continue to evolve as brokers compete to provide services to buyers and sellers," Haag said in an email.

What's next for MLSs not covered by the NAR deal

Northwest MLS is the first non-NAR MLS to publicly announce its intentions about whether to opt in to the NAR settlement. 

About 30 organizations — MLSs not wholly owned by a Realtor association — have the opportunity to opt in but must decide by a June 18 deadline. If all of the MLSs in that group opted to settle, they would have contributed around $34 million to the settlement fund.

NWMLS has not been named as a defendant in any of the buyer agent commission cases. 

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