NAR Approves New Model Rules For MLS About "Short Sales"

The National Association of Realtors (NAR) board of directors has recently adopted new policy for disclosure of short sale listings in a multiple listing service.

The NAR directors “approved new model rules for Multiple Listing Services (MLSs) that would enable practitioners to alert one another to potential short sales and put them on notice about the sharing of any reduction in gross listing commission required by a lender. MLSs are given the authority to decide whether or not their participants have to disclose reasonablyknown short sales."

All MLSs must provide their members with the means to disclose that a given listing is a short sale.

For purposes of the new rule, short sales are defined as “a transaction where title transfers; where the sale price is insufficient to pay the total of all liens and costs of sale; and where the seller does not bring sufficient liquid assets to the closing to cure all deciencies.”

Agents for buyers in short sales must advise the buyer clients that a proposed short sale price accepted by the seller might not be approved by the lender. Buyers should be careful and not get too excited about a possible bargain at short sale.

It's not the easy road for a real buyer.

Posted by Harrison K. Long, Explore Properties Group, June 5, 2008
Source: Bob Hunt.

What Does The NAR v. DOJ Case Settlement Mean?

The U.S. Lawsuit vs. the National Association of Realtors Online Listing Policy Is Being Settled as of May 27, 2008, which calls for the adoption of a new online listings policy.

Source: settlement proposal (United States v. National Association of Realtors, May 27, 2008)

The lawsuit had challenged the NAR policies governing the online sharing and display of property listings, including Virtual Office Web site (VOW) and Internet Listings Display (ILD) policies.

The biggest win for NAR was the DOJ's concession that MLS members must be actively engaged in real estate transactions, which is defined broadly include brokers who make an effort to be engaged in real estate transactions, but fail to close any deals over an extended period of time.
Another NAR win is a registration requirement that will restrict access to VOWs and enable brokers to keep records of VOW-registered e-mail addresses. Those must be confirmed before the registrant can access the VOW.
Other data-sharing policies for multiple listing services and participants, known as Internet Data Exchange (IDX) policies, were not challenged in the lawsuit and are not affected by the proposed settlement.

The proposed settlement provides that the display of listing information on a VOW site does not require separate permission from the participant whose listings will be available on the VOW. However, it does provide that individual sellers can choose to block information about their home from display on the Internet.

The proposed settlement is not yet final, will be published in the Federal Register and is subject to a 60-day comment period and a 30-day review by a judge. NAR must adopt the modified VOW policy within five business days of the final judgment on the settlement agreement.

Posted by Harrison K. Long, Explore Properties Group, May 28, 2008
Source: settlement proposal (United States v. National Association of Realtors, May 27, 2008)

U.S. Lawsuit vs. National Association of Realtors Online Listing Policy Is Being Settled (5-27-08)

The U.S. antitrust lawsuit filed against the National Association of Realtors in 2005 has reached a proposed settlement, May 27, 2008, that calls for the adoption of a new online listings policy.

The lawsuit had challenged the NAR policies governing the online sharing and display of property listings, including Virtual Office Web site (VOW) and Internet Listings Display (ILD) policies.

Other data-sharing policies for multiple listing services and participants, known as Internet Data Exchange (IDX) policies, were not challenged in the lawsuit and are not affected by the proposed settlement.

The Justice Department had alleged that NAR's policies could restrict competition and consumer choice in real estate services, that those policies would discourage low-cost services.

The DOJ had challenged the NAR requirement that multiple listing services permit brokers to selectively withhold property listings from companies that operate VOW-based search sites that feature a collection of property listings from MLS members.

The proposed settlement provides that the display of listing information on a VOW site does not require separate permission from the participant whose listings will be available on the VOW. However, it does provide that individual sellers can choose to block information about their home from display on the Internet.

The DOJ said that the MLSs that had adopted policies in violation of the settlement proposal must rescind those rules. The DOJ reports that under the new policy, brokers participating in a NAR-affiliated MLS will not be permitted to withhold their listings from brokers who serve their customers through virtual office Web sites.

Another rule challenged by Justice Department related to restrictions in using VOW sites as a source of referral fees from other brokers. The proposed settlement provides that an MLS may not prohibit, restrict, or impede a participant from referring registrants to any person or from obtaining a fee for such referral.

The NAR position is that all members of MLS must be actively engaged in the act of real estate buying and selling, which prevents MLS members from joining an MLS specifically to "scrape" property listings from other members.

The proposed settlement is not yet final. It will be published in the Federal Register and is subject to a 60-day comment period and a 30-day review by a judge. NAR must adopt the modified VOW policy within five business days of the final judgment on the settlement agreement.

Posted by Harrison K. Long, Explore Properties Group, May 28, 2008
Source: settlement proposal (United States v. National Association of Realtors, May 27, 2008)