Northwest MLS criticizes $418M NAR settlement agreement, opts out

Northwest MLS, the largest multiple listing service in the Pacific Northwest, will not take part in the $418 million agreement reached by the National Association of Realtors (NAR) in the Sitzer/Burnett case. 

In fact, NWMLS said that its own rules on buyer agent compensation are fairer and more transparent than the terms NAR agreed to in March. It also criticized NAR for pushing “consumers and brokers to make secret deals off MLS, inviting deceptive practices, discrimination and unfair housing.“

’Secret deals’

The NWMLS board of directors made the decision to opt out at its most recent meeting, the organization said Tuesday. NWMLS is member-owned and not affiliated with the national trade association, although it was eligible to join in under the terms of the settlement. It has roughly 35,000 members and could have been released from claims if it contributed roughly $100 per member to the settlement fund (or $3.5 million).

But doing so would have bound NWMLS to the NAR settlement terms. And that was unacceptable to the group.

“NAR’s proposed settlement agreement largely duplicates the rules and practices in place in NWMLS’ service area for several years — with one notable exception: The settlement agreement eliminates compensation transparency for buyers and restrains sellers’ choice by prohibiting sellers from making offers of compensation through the MLS,“ the organization stated.

“Instead, the settlement agreement allows for offers of compensation ’off MLS,’ where that information is hard to find and not available to all buyers and brokers. That change is a step in the wrong direction and is detrimental to consumers and brokers alike.“

NWMLS said its rules and forms, together with the recently revised changes to buyer representation agreements, provide for consumer-friendly brokerage relationships and strong transparency. (It also cited its 2019 elimination of a requirement that a seller offer compensation to the buyer’s broker, as well as changes in 2022 that require any compensation to the buyer’s agent be set and paid by the seller rather than the listing broker.)

“NAR’s removal of compensation transparency from the MLS pushes consumers and brokers to make secret deals off MLS, inviting deceptive practices, discrimination and unfair housing,“ NWMLS stated. “Depriving buyers of information about the transaction risks harming buyers, especially those buyers who are already disadvantaged, including first-time home buyers and members of protected classes.

“Prohibiting offers of compensation in the MLS also unnecessarily restrains the seller’s choice and absolute right to offer compensation to a brokerage firm representing the buyer.“  

The NWMLS said it plans to revise its forms and listing processes in mid-August to ensure that sellers are aware of an option that currently exists when listing a property for sale.

NWMLS has not been named as a defendant in any of the commission lawsuit cases, although it has scrapped with the Department of Justice over its statement of interest in the Nosalek case.

Related More:

• Commission Lawsuit
• National Association of Realtors
• northwest mls