MLSs want to stop rule violations before they happen 

In the brave new residential real estate world, where including offers of compensation on the MLS is a thing of the past, the onus falls on those MLSs to enforce the new rules — and ensure that agents and brokers are meeting the new professional standards set forth in the NAR settlement.

While associations spent much of the summer drafting new forms and brokerages created new training materials and resources to help their agents market their value, MLSs were tasked with changing their tools and systems during the lead-up to the August deadline for implementing industry practice changes. 

Stopping MLS violations before they happen

Some agents are finding ways of "being cute" by sharing compensation details through clever, and not necessarily permissible, avenues — but there is a clearly defined line in the sand when it comes to sharing offers of compensation on the MLS. 

And while MLSs are charged with ensuring that offers of compensation don't make their way onto their systems, the point is to educate brokers and agents, not to immediately punish members by imposing a fine, Rene Galicia, EVP of Customer Advocacy for Bright MLS, told Real Estate News.

"We don't want to have a heavy-handed approach on fining agents — a fine should be a last resort," he said, while explaining that Bright MLS has also added new functionality in its system to proactively flag potential violations. 

"Let's help avoid violations before they even get to the level of a fine, because ultimately, it's not about fining agents, it's about ensuring that we have good quality data and that the information that's in our system complies with the terms of the settlement."

Compliance will be challenging and resource-intensive

Still, enforcement of the new practice changes "is going to look any number of ways," Galicia explained, while also adding new pressure and operational burdens on the MLSs. Bright routinely conducts audits of listings and information shared into its system, Galicia said, but building out a new resource-intensive compliance team is "quite a bit to put on an MLS," he explained. 

"You know, having compliance teams is very expensive," Galicia said. "We already have a mechanism in place to audit [listings], and it's typically by asking for copies of documentation, looking for patterns that we can automate so that it can help us in our compliance checks."

Brokerage leaders play a role in preventing violations

MLSs may be the enforcers, but brokerage leaders can play a big role in helping agents avoid accidentally triggering a violation or fine, Laura Ellis, chief strategy officer and head of residential sales at Baird & Warner, told Real Estate News.

"There's a disparity in how listing agents want to see the transactions structured, and some listing agents are still trying to say, 'No, we want to do cooperating commission,'" through voluntary offers of compensation, she explained. "The tricky part is that really flies in the face of the motivation of the suits and the guidance that the DOJ is giving us."

These scenarios put agents in "tricky situations," Ellis said, because agents "want to follow the spirit of the law" but they also "want to get their client the house."

Ellis said she's advising her agents to see if the buyer specifically requests a credit from the seller, because while voluntarily offering compensation — as some major brokerages are continuing to push for — "isn't necessarily an agent breaking the rules," Ellis said, it's "just not in the spirit of what the DOJ is wanting to see happen."