Compensation On and Off the MLS
On August 17th, 2024 the MLS Rules and Regulations were updated to prohibit compensation on the MLS and limit the ability to advertise compensation off of the MLS when using MLS data:
Section 5: No Compensation Specified on MLS Listings:
Participants, Subscribers, or their sellers may not make offers of compensation to buyer brokers and other buyer representatives in the MLS. Use of MLS data or data feeds to directly or indirectly establish or maintain a platform to make offers of compensation from multiple brokers to buyer brokers or other buyer representatives is prohibited and must result in the MLS terminating that Participant’s access to any MLS data and data feeds.
Compensation On the MLS
Listings input into the MLS are prohibited from advertising compensation to a buyer's agent, this includes the existence of compensation even if no amount is specified.
While compensation is not allowed on the MLS, concessions are allowed on the MLS. What's the difference between these 2 terms though?
- Compensation is any bonuses, incentives, or consideration given to a buyer's broker or agent.
- Concessions are any bonus, incentive, or consideration given to the buyer themselves
So your listings on the MLS can advertise any bonuses or incentives for buyers such as closing cost assistance, repair credits, or appliances. It's important to remember that any concessions advertised on the MLS are fully negotiable and not guaranteed.
"If I offer closing cost funds can't the buyer just use that money to pay their agent?"
Yes, while you are unable to advertise compensation for buyer's agents there is no restriction on what a buyer does with any concessions they receive as part of the transaction. This means a buyer could use their concessions to help pay their buyer's agent.
Examples of Prohibited Language:
- "X% BAC"
- This is an offer of Buyer Agent Commission which is compensation.
- "$10,000 Realtor Bonus"
- Flat amounts of compensation are prohibited
- "Compensation Available"
- Even though a number was not provided advertising that buyer agent compensation is available is prohibited.
Examples of Acceptable Language
- "Seller offering $10,000 towards closing costs"
- This language is acceptable since it is a concession being paid to the buyer
- "Carpet allowance available at closing"
- This language is acceptable since it is a concession being offering to the buyer and not a buyer's broker or agent
- "Seller willing to negotiate concessions"
- Because it is acceptable to advertise concessions there is no prohibition on disclosing their existence.
Compensation Off the MLS
Section 5 also put restrictions on how advertisements off the MLS can use MLS data. You can determine if something is a violation if it meets all three of these criteria:
- The advertisement has compensation
- The advertisement has MLS data
- The advertisement is establishing or maintaining a multiple brokerage platform
Let's break those down individually:
The advertisement has compensation
The advertisement has compensation or the existence of compensation. IE: "X% to buyer's agent", "$100 BAC", "Compensation information available upon request"
The advertisement has MLS data
MLS data is any data sourced from the MLS. This includes MLS numbers, MLS printouts, screenshots from the MLS, photos taken from the MLS and more. If it is sourced at all from the MLS it is considered MLS data.
"Why are my listing photos considered MLS data?"
Your original listing photos are not considered MLS data. However, downloading the photos from the MLS or an MLS fed source would be considered MLS data. The easiest way to check if it's MLS data is to look for the GEPAR MLS watermark on the bottom left of the photos.
The advertisement is establishing or maintaining a multiple brokerage platform
A multiple brokerage platform is any platform that multiple brokerages could all share listing information. Common examples of multiple brokerage platforms include facebook, instagram, whatsapp chats, and most forms of social media. Determining if it's a multiple brokerage platform is simple. Can multiple brokerages contribute listing information even in the form of comments, replies, or posts? If yes it's a multiple brokerage platform.
Examples of Prohibited Advertisements:
- A post on Facebook with a link to the MLS offering X% commission to any Realtors
- This post would be a violation because it meets all three of the criteria:
- Facebook is a multiple brokerage platform
- The advertisement has compensation
- The advertisement uses MLS data
- This post would be a violation because it meets all three of the criteria:
- A message in a Whatsapp chat with Realtors from multiple brokerages offering $10,000 commission with a screenshot of the MLS listing
- This message would be a violation because it meets all three of the criteria:
- The Whatsapp chat is a multiple brokerage platform
- The advertisement has compensation
- The advertisement uses MLS data
- This message would be a violation because it meets all three of the criteria:
Examples of Acceptable Advertisements:
- A post on Facebook with a link to the MLS but no compensation
- This advertisement would not be a violation because it only meets 2 of the 3 criteria:
- Facebook is a multiple brokerage platform
- The advertisement does not have compensation
- The advertisement uses MLS data
- This advertisement would not be a violation because it only meets 2 of the 3 criteria:
- A flyer at an open house with a screenshot from the MLS offering $10,000 commission
- This advertisement would not be a violation because it only meets 2 of the 3 criteria:
- The flyer is not a multiple brokerage platform
- The flyer does have compensation
- The flyer does have MLS data
- This advertisement would not be a violation because it only meets 2 of the 3 criteria: