Realtor Fines for Breaking the New MLS Rules!!!

In the ever-evolving landscape of real estate, particularly with the recent changes in MLS rules, it’s crucial for agents to stay updated to avoid hefty fines and maintain compliance. With fines for non-compliance reaching up to $10,000 and even risking license suspension for repeat offenses, it’s more important than ever to understand the new regulations and how to navigate them effectively.

Understanding the New Rules and Fines

One of the most significant changes is the prohibition of including buyer agent compensation in MLS listings. This rule has led to confusion and, unfortunately, some agents facing fines for what they believed were harmless actions. A notable instance involved an agent who faced a $1,000 fine for simply asking other agents to contact them for details about buyer agent compensation in the broker remarks section. This incident serves as a stark reminder of the stringent enforcement of these new rules.

Tony Geraci, Broker/Owner of Century 21 HomeStar, emphasizes that these fines are not just a scare tactic but a real consequence for those who try to circumvent the rules. “It’s clear that the MLS and regulatory bodies are serious about enforcing these new guidelines,” Tony explains. “The goal is to ensure fairness and transparency in real estate transactions, and any attempts to sidestep these rules will be met with significant penalties.”

What You Should and Shouldn’t Do

So, what exactly should agents be aware of to avoid these fines? Let’s break it down:

No Compensation in the MLS: The new rules strictly prohibit including any details about buyer agent compensation within the MLS. This applies to all fields within the MLS, including broker remarks. Even subtle hints or codes intended to convey compensation information are off-limits. Trying to skirt the rules with coded messages or indirect language will likely lead to penalties.
How to Communicate Compensation: Agents can still communicate compensation details, but it must be done outside the MLS. Acceptable methods include direct communication through email, text, or phone calls. If a buyer’s agent asks about compensation, a listing agent can provide that information privately, but it should not be disseminated publicly or through any MLS-connected platforms.
Using Personal Websites: Some brokerages, like Century 21, have clarified that agents can list compensation details on their personal websites, as long as these websites are not directly linked to the MLS. However, agents must ensure that they have their seller’s permission to post this information and that their listing agreement supports such actions.
Avoiding Public Discussions: Public forums, including social media platforms like Facebook groups, are not the place to discuss specific compensation details. These platforms are monitored, and any discussions that could be seen as non-compliant with the new rules could result in fines. It’s best to keep these conversations within your brokerage or with direct colleagues to avoid any issues.

Navigating Buyer Agency Agreements

With the new rules, buyer agency agreements have become more critical than ever. Before engaging in detailed real estate discussions, such as property tours, pre-approval processes, or financial discussions, agents must have their clients sign these agreements. This ensures that both parties understand the working relationship and compensation expectations upfront.

Tony advises that even if you are working with out-of-town investors or virtual buyers, the buyer agency agreement should be signed before any substantial work is done. “The moment you start discussing properties or financial details, you need to have that agreement in place,” Tony insists. This protects both the agent and the client and keeps everything above board.

The Importance of Proper Documentation

Proper documentation and compliance aren’t just about avoiding fines; they are about maintaining professionalism and trust in the real estate process. Mike Ferrante, leader of the 21 Mike Team, stresses the importance of being prepared. “Keep all necessary documents with you, whether in physical form or ready to send via email,” Mike advises. “This ensures that you’re never caught off guard and that your clients are always fully informed.”

Conclusion

As the real estate industry continues to evolve, staying informed and compliant is crucial. The new MLS rules are designed to promote fairness and transparency, and while they may require some adjustments, they ultimately benefit the entire industry. Agents who stay proactive, communicate clearly, and follow the rules will not only avoid fines but also build stronger, more trustworthy relationships with their clients.

If you have any doubts or need clarification, always consult with your broker or legal advisor before taking action. It’s better to be safe than sorry in this new era of real estate.

For more information or to discuss your real estate needs, visit 21 Mike Team or schedule an appointment with Mike or Tony. Stay compliant, stay informed, and continue to thrive in your real estate career.

For more great Real Estate content:

You can listen to our Podcast FREE BEER AND REAL ESTATE or YouTube for Mike’s weekly classes!!!

https://freebeerandrealestate.buzzsprout.com/

SCHEDULE AN APPOINTMENT WITH MIKE: 21Mike.com

EMAIL: MIKE@21MIKE.COM

CHECK OUT OUR TRAINING VIDEOS ON YOUTUBE: https://www.youtube.com/user/21mikec21

FACEBOOK: facebook.com/21MikeTeam

TRAINING ON ZOOM, TUESDAYS AT 11:30 EST: https://bit.ly/3r9Lw2c