The Northwest Multiple Listing Service (NWMLS) has announced further revisions to its rules and forms, building upon updates from 2019. These member-driven changes are designed to significantly enhance transparency around real estate broker compensation and foster more open discussions and negotiations between consumers and brokers.
Effective October 3, 2022, these revisions inject greater flexibility into the processes of listing and purchasing property through the Northwest Multiple Listing Service. They are also intended to stimulate innovation and competition amongst the NWMLS’s extensive network of 32,000 real estate brokers.
Back in October 2019, the Northwest Multiple Listing Service took a leading step in the industry by being the first listing service nationwide to publicly display – and enable its member firms to display – the amount of compensation a seller was offering to a broker representing the buyer. Concurrently, NWMLS removed the previous mandate that sellers must offer compensation to buyer’s brokers. These initial changes were crucial first steps toward empowering consumers with a clearer understanding and greater control over how they compensate their real estate representation.
The latest changes implemented by the Northwest Multiple Listing Service in October 2022 include several key provisions:
- Prominent Display of Buyer Broker Compensation: The compensation offered by the seller to the buyer’s broker will now be clearly stated on the first page of the NWMLS purchase and sale agreement. This provides a clear opportunity for the buyer and their broker to either accept this compensation or negotiate modifications through an addendum to the agreement.
- Direct Seller-Determined Compensation: The compensation offered to the buyer’s broker will be a direct offer originating from the seller. This is a shift away from the previous model of commission sharing between brokerage firms, giving sellers more direct control.
- Updated Listing Agreement Options: The Northwest Multiple Listing Service listing agreement will now feature new options for broker compensation. These options are designed to better reflect the distinct roles of both the listing broker and the buyer broker in a real estate transaction.
- Flexible Buyer Representation Agreements: NWMLS buyer representation agreements will now present alternative compensation structures for buyers and their brokers. These alternatives will be contingent on the specific terms outlined in the property listing, offering greater adaptability.
- Empowering Broker Innovation: Brokers will have increased flexibility to create their own representation agreements with both sellers and buyers. This empowers them to differentiate their service offerings and fee structures, better cater to diverse consumer needs and interests, and foster healthy competition within the real estate market.
Tom Hurdelbrink, CEO of Northwest Multiple Listing Service, emphasized the organization’s commitment: “NWMLS is dedicated to fostering an open, transparent, and competitive marketplace for both real estate brokers and consumers. Given that NWMLS transaction forms are utilized in the vast majority of residential home sales across Washington State, we believe these changes represent a significant advancement in the real estate brokerage industry. They are designed to help brokers in the Northwest continue to be national leaders in superior consumer service.”
Stuart Heath, owner of Bellmark Real Estate and Chairperson of the NWMLS Board of Directors, highlighted the importance of buyer awareness: “Buyers deserve complete clarity regarding how and how much their broker is compensated. Furthermore, they should have the unrestricted opportunity to negotiate that compensation with their chosen broker. These revisions by the Northwest Multiple Listing Service are a constructive step forward in the industry’s ongoing evolution.”
Robb Wasser, branch manager at Windermere Real Estate/East in Bellevue, underscored the value of buyer brokers: “Both parties involved in a real estate transaction should have the opportunity to openly discuss compensation with their respective brokers and reach a mutual agreement on payment for services rendered. Buyer brokers provide varied services and skill sets, and their compensation should reflect this. The Northwest Multiple Listing Service’s updated rules and forms acknowledge these essential aspects. A proficient buyer’s broker can be instrumental in a client successfully purchasing a home, a fact consistently demonstrated by repeat business and client referrals.”
Marty McClendon, designated broker for Redfin in Seattle, also pointed out the benefits for sellers: “Alongside the advantages for buyers and buyer brokers, these changes offer sellers more options when listing their properties. Sellers can now directly offer compensation to a buyer broker, or opt not to offer compensation at all, and they can structure listing agreements to accommodate various buyer representation scenarios. The broker-owned Northwest Multiple Listing Service has once again taken a leading position in the industry by promoting a competitive and equitable marketplace for brokerages of all sizes. This empowers firms to innovate and differentiate their services for consumers. It is our hope that the rest of the industry will demonstrate the same commitment and follow the Northwest Multiple Listing Service’s example.”
Bobbie Petrone Chipman, Pierce/South King County regional leader of John L. Scott, summarized the consumer perspective: “Buying or selling a home represents the most complex and financially significant transaction in most people’s lives. Consumers are entitled to a truly competitive marketplace, a diverse range of service and pricing options, and meaningful transparency when making such critical, life-altering decisions.”
The process of revising NWMLS Rules, policies, and related real estate transaction forms is a collaborative effort involving numerous participants from the brokerage industry. This includes active brokers serving on NWMLS committees and task forces, legal experts specializing in real estate, member firms, and other industry professionals. All modifications are subject to thorough review and final approval by the NWMLS Board of Directors.
The updated rules and forms from the Northwest Multiple Listing Service officially took effect on Monday, October 3, 2022.
