The ECBOR Executive Committee met recently to discuss the NAR settlement and its potential impact on the MLS, ECBOR members and the consumers. The Executive Committee wants to assure ECBOR members that Leadership and staff are here to help members navigate the changes required by the NAR settlement for MLS's.

WHAT DOES THE SETTLEMENT MEAN FOR MLS'S?

MLS' s who opt-in to the NAR settlement must sign "Appendix B" that defines the terms of the settlement. MLS's will have "60 days from the filing of the first motion for preliminary approval of the agreement" to opt-in. Once they opt-in, they will have 150 days to enact the terms. At this time, all the information has been turned over to local legal counsel. Since ECMLS is a member of IRMLS, it may or may not be necessary for ECMLS to take action but we want to be prepared.

WHAT IS IRMLS DOING?

IRMLS also has to decide if they wish to opt-in to the settlement agreement. That discussion will begin at their April 3rd Board meeting. The IRMLS Board is working with their legal team to discuss next steps and the timeline. It is likely that IRMLS and ECMLS will opt-into the agreement. But at this time, it is under review by IRMLS Legal Counsel.

WHAT HAPPENS WHEN AN MLS OPTS IN?

MLS's must adhere to the requirements included in Appendix B. The main requirements are as follows:

1. Removal of Buyer Broker Compensation field from MLS
2. Update MLS rules/policies to remove any requirement that Broker compensation must be offered in the MLS
3. No other field can be used to extend offer Compensation in the MLS
4. MLSs cannot create, support or facilitate any non-MLS mechanism for the listing broker or sellers to make offers of compensation to buyers or buyer's representatives.
5. MLSs cannot support any 3rd party website that seeks to re-create a product that includes "offers of compensation"

Appendix B Does NOT prohibit Sellers from offering buyer concessions on an MLS (e.g., for buyer closing costs) so long as such concessions are not limited to or conditioned on the retention of or payment to a cooperating broker or buyer's representative. IRMLS is likely to add a Seller Concession field to Paragon.

We will provide more information on Appendix B requirements in the weeks to come.

IRMLS is also changing to one set of MLS rules for all 7,000+ members including ECBOR Members. Once the rules are approved, (could be in April) IRMLS will allow time for the local boards to educate their members before the rules are effective. ECBOR will work hard to get members up to date on all new IRMLS rules. After the rules are approved, compliance will remain local so we will help ease our members into the rule changes with consideration and compassion.

Note: Compliance will be the next thing that will move to IRMLS.

What is the Executive Committee's Plan?

The Executive Committee is developing a communication plan to provide ECBOR members with practical and accurate information about the settlement terms.

1. ECBOR is posting updates on Facebook, Instagram, ecbor.com and emailing Managing Brokers and members. The first post went out Wednesday on FB and Insta. Members are encouraged to follow us on Instagram @ecbormls
2. Our Executive team will be creating short videos designed to keep members updated and in the loop.
3. ECBOR’s leadership is committed to providing education to learn more about doing business in a post-settlement world and what your buyers need to know.
4. ECBOR will also be sending a press release to local media. The Press Release may generate person to person interactions with the press. Note: IAR President Janet Parham sent a press release to all major stations in Indiana.

Read the IAR Press Release NOW

What is the Timeline for Action?

NOW is when the work begins to help our members understand how the settlement agreement affects them and how they will do their business in the months to come.

In the next several weeks, a motion will be filed with the court to approve the terms of the settlement, however, NAR is encouraging MLS to move forward with the actions in Appendix B because it could take months for the settlement terms to be approved. ECBOR's goal is to start NOW to digest the information so we can get it to our members. We are attending many industry meetings or meetings with NAR's legal counsel to go over the terms of the settlement. We will share what we learn with Managing Broker and our members.

ARE ALL REALTORS COVERED UNDER THE SETTLEMENT?

NAR has said that most Realtors are covered under the settlement and no action is required to be covered by the protections of the lawsuit. This includes those Realtors working in brokerages not covered under the NAR agreement. Likely there will continue to be settlements negotiated in the future since brokerages doing 2 Billion+ annually are not covered.

When will the "NEW NORMAL" Begin

We are beginning now to process all the information coming in. The goal is to understand it all first and then help our members through this process. This all takes time but communication will continue. The settlement "effective date" is MID-JULY effective date.

Buyer Agency Agreements

1. July 1st, Indiana will require Buyer Agency Agreements
2. Mid-July Appendix B of NAR settlement will require signed Buyer Representation Agreement prior to showing the property.
3. Appendix B: Agreements must specify & conspicuously disclose the amount or rate of compensation and how the amount will be determined
4. Appendix B: Amount reflected must be objectively ascertainable and may not be open-ended. Example: buyer broker compensation shall be whatever amount the seller is offering to the buyer
5. Appendix B: May not receive compensation for brokerage services from any source that exceeds the amount or rate agreed to in the agreement with the buyer.

ECBOR will make sure its members know how the settlement will impact them and what we can do to help. More information will be coming out about the terms in Appendix B.

Many Managing Brokers are doing a great job working with their agents to help them understand what changes will be necessary.

ECBOR will be focused on the MLS changes based on the settlement but we are happy to help in any area.

If you are interested in learning more about working with Buyers; ECBOR is partnering with IAR and several local boards to host an “in-person” ABR course for $35.00 the covers the cost of 12 Hours of CE. Course will be held locally at the Matterhorn. Space is limited to 60 so register soon if you are interested.

REGISTER HERE

NAR is also offering a free "on-line" ABR Course.

Note; no Indiana CE. Normally, this course cost $295.

FOR MORE INFORMATION

To keep on top of the information sent by NAR

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