Northwest Multiple Listing Service again updates rules and forms to enhance transparency and flexibility for brokers and consumers
Revisions relate to broker compensation to promote innovation and competition
KIRKLAND, Washington (June 9, 2022) - Northwest Multiple Listing Service ("NWMLS"), building on updates implemented in 2019, announced additional revisions to its rules and forms. These member-driven revisions further enhance transparency regarding broker compensation and create additional opportunities for consumers and brokers to discuss and negotiate compensation.
The changes, effective October 3, 2022, provide greater flexibility for consumers and brokers when listing and purchasing real estate and promote innovation and competition among NWMLS's 32,000-member real estate brokers.
In October 2019, NWMLS was the first listing service in the country to publish, and allow its member firms to publish, the amount of compensation the seller offers to pay a broker representing the buyer. At the same time, NWMLS also eliminated the requirement that a seller offer compensation to the buyer's broker. These changes were the first steps toward providing consumers with increased understanding and control of how they compensate their real estate broker.
The changes taking effect in October include the following:
- The compensation the seller offers to the buyer broker will be prominently stated on the first page of the NWMLS purchase and sale agreement, with an opportunity for the compensation to be accepted by the buyer and the buyer's broker or modified by the parties in an addendum to the agreement;
- The compensation the seller offers to the buyer broker will be a direct offer determined by the seller - rather than commission sharing between the two brokerage firms;
- The NWMLS listing agreement will provide new options for broker compensation to address the role of the listing broker and buyer broker in the transaction;
- The NWMLS buyer representation agreements will offer alternatives for buyers and their broker for compensation that depend on the terms of the listing; and
- Brokers will more easily be able to fashion their own form of representation agreements with sellers and buyers to differentiate their services and fees, accommodate consumer's needs and interests, and compete in the market.
"NWMLS is committed to facilitating an open, transparent, and competitive marketplace for real estate brokers and consumers," said NWMLS CEO Tom Hurdelbrink. "NWMLS transaction forms are used in nearly every residential home sale in Washington State. We believe these changes are a significant step in the evolution of the real estate brokerage industry and will help brokers in the Northwest continue to lead the nation in better serving consumers."
"Buyers should be fully aware about how and how much their broker is compensated," commented Stuart Heath, owner of Bellmark Real Estate and chairperson of the NWMLS Board of Directors. "And buyers should be given the opportunity to freely negotiate that compensation with their broker. These changes are a positive step to help the industry evolve."
"Both parties to a real estate transaction should have an opportunity to discuss compensation with their brokers and agree to what they are paid for their services. Buyers' brokers offer different services and skills and should be compensated accordingly. The NWMLS's revisions to its rules and forms appreciate these facts," said Robb Wasser, branch manager at Windermere Real Estate/East in Bellevue. "A buyer's broker can be the difference between owning a home or not and we consistently see that clients value the service they receive through repeat business and referrals."
"Along with the benefits to buyers and buyer brokers, these changes provide sellers with additional options for listing their property for sale. Sellers can offer compensation directly to a buyer broker, or choose to offer no compensation, and are able to structure listing agreements to account for different scenarios regarding buyer representation," remarked Marty McClendon, designated broker for Redfin in Seattle. "Broker-owned NWMLS has once again led the industry in promoting a competitive and fair marketplace for brokers large and small, allowing firms to innovate and differentiate their services to consumers. I can only hope the rest of the industry has the courage to follow NWMLS's lead."
"Buying and selling a home is the most complex and expensive transaction that most people will ever engage in," said Bobbie Petrone Chipman, Pierce/South King County regional leader of John L. Scott. "Consumers deserve a truly competitive marketplace, a variety of service and pricing options, and meaningful transparency when making such important, life-altering decisions."
The process to revise NWMLS Rules, policies, and related real estate transaction forms includes many participants from the brokerage industry. This includes numerous brokers who serve on various NWMLS committees and task forces, industry attorneys, member firms, and other industry experts. All changes are reviewed and approved by the NWMLS Board of Directors.
The new rules and forms will be effective Monday, October 3, 2022.