The ongoing National Association of Realtors (NAR) lawsuit is causing significant ripples throughout the real estate industry. However, it's essential for agents in Western Pennsylvania to understand the unique position of our region's Multiple Listing Service (MLS) and how it differs from other areas. This blog post aims to clarify these differences and provide transparency on how these changes will impact your day-to-day operations.

The Independence of West Penn Multi-List (WPML)

First and foremost, it's critical to understand that the West Penn Multi-List (WPML) is independent of NAR. Unlike many MLSs across the country that require NAR membership, WPML does not mandate this for its members. While WPML often chooses to abide by regulations similar to those of NAR, this is a choice they make independently. This distinction significantly impacts how the current lawsuit and subsequent changes will affect its members.

Buyer Agency Contracts and NAR Membership

One of the pivotal changes for NAR members on August 17, 2024, will be the requirement for buyer agency contracts to be signed before showing homes to buyers. This requirement applies to NAR members and its affiliates. If you are not a member of NAR or a NAR Affiliated MLS, you are not bound by this rule unless your brokerage specifically requires it in their company policy. Agents should understand this is not a Real Estate Commission or WPML mandate.

The Realtor Designation

Choosing not to be a member of NAR means you will lose the "Realtor" designation. For some, this designation carries significant weight and prestige. It's a factor worth considering if you value the additional recognition and credibility that comes with it. However, many successful agents operate without it, focusing instead on their client relationships and local market knowledge.

The Impact of Removing Buyer Agency Commissions from the MLS

One of the most direct impacts of the NAR lawsuit on our market is the removal of the buyer agency commission section from the WPML. While this change may seem daunting, it doesn't eliminate the possibility of cooperating broker compensation agreements. You can still negotiate and establish these agreements before showing properties. If another broker is unwilling to offer compensation, It would be up to the buyer to decide if they would still want to view the home, depending on their financial situation and ability to compensate their agent.

This will likely prompt listing agents to continue offering a buyer agency commission as they always have, realizing that properties without such agreements may struggle to attract buyers, especially first-time home buyers.

Listing agents who do not appropriately communicate these changes and devalue their service just to win a listing will not only be doing a disservice to their seller(s) but also to themselves and the industry. The mainstream media has done nothing to help this situation. On the contrary, they have blatantly lied to the general public, leaving it up to us as professionals to clearly communicate to our seller(s) the possible outcome of not cooperating with other brokers who already have a qualified buyer.

Transparency and Communication

Many brokers and office managers may not fully communicate these nuances to their agents, possibly out of concern for navigating the complex legal landscape. However, it’s vital for you to have a clear understanding of your rights and responsibilities. This transparency ensures you can make informed decisions about your membership and practices.

Conclusion

In summary, the NAR lawsuit introduces changes that vary in impact depending on your association with NAR and WPML. As an independent MLS, WPML’s adherence to NAR-like regulations is a choice, not a mandate. Non-NAR members are not required to have a buyer agency contract signed before showings, allowing for flexibility in client interactions. However, proper communication and guidance are paramount and should not be overlooked. Losing the "Realtor" designation is a consideration for those who value it. The removal of the buyer agency commission section from the WPML emphasizes the importance of pre-negotiated broker compensation agreements.

Staying informed and adaptable will ensure you continue to serve your clients effectively while navigating these changes. As always, open communication and understanding your options are vital to maintaining successful real estate practices.