Multiple Listing Policy Considerations

Multiple Listing Policy Considerations
Omni Shoreham Regency Ballroom Wednesday May 15, 2014 9:00 am to 12:00 pm

Policy Statement 7.57 Categorization of MLS Services, Information and Products

Background Information Policy Statement 7.57 was adopted in 1996 by NAR Board of Directors (and essentially unchanged until recently) Included three categories of services Core Basic Optional

Background Information Core The fundamental information, services and products essential to effective functioning of MLS, i.e., current listings and the offers of cooperative compensation from listing to cooperating brokers

Background Information Basic Core plus additional information and services that could be included by the MLS, and used and paid for by participants and subscribers on either a mandatory or discretionary basis Original policy included list of examples – Labeled “Such As” (NOT Exhaustive List)

Background Information Optional MLS may not require a participant to use, participate in or pay for… Optional services originally included lockbox equipment and "advertising or access to advertising (whether print or electronic)"

Background Information Policy remained unchanged until questions were raised about requiring MLS participants and subscribers to lease or purchase lock box equipment At 2012 NAR Convention, Multiple Listing Issues and Policies Committee directed that the policy be revisited…

Background Information Winter 2012-2013 -- input sought from Committee members and MLSs March, 2013 -- MLS Technologies and Emerging Issues Advisory Board reviewed and suggested revisions May 2013 – After further input, review and modification, Policy 7.57 revisions adopted by Committee, approved by NAR BoD

Background Information Revised policy included public-facing websites on the list as a Basic service Optional services (lockboxes & advertising or access to advertising) may be included as Basic services provided an MLS does not derive “economic benefit” (defined), and provided that inclusion complies with state law or circuit court decisions

Background Information Lingering questions remained about whether the Basic “list” properly reflected current and future trends for MLSs June 2013 -- input sought from Committee and broad range of industry stakeholders October 2013 -- Advisory Board reviewed, decided against proposing changes and forwarded for discussion at MLS Forum

Background Information November 2013 – MLS Forum discussed input, along with suggestions from COVE and from a Forum panel on relationships between participants & MLS executives MLS Committee referred to the Advisory Board for consideration & development of possible action recommendations for consideration at the RPC&TE

Background Information March 2014 -- All discussions and input received and related to Basic services were re-considered by Advisory Board Advisory Board determined that the Basic “list” can never be exhaustive nor keep up with every new technology or service Items on the “list” are examples only – policy says “such as, but not limited to”

Policy Recommendation Existing MLS Policy Statement 7.57, Categorization of MLS Services, Information and Products, is appropriate as written, and no changes will be recommended to the Committee

Policy Statement 7.79 Reproduction of MLS Information
Automated Valuation Models ("AVMs")

What Is This Issue About? Fall 2014 – Staff approached regarding use of MLS information by participants to develop their own AVMs. Based on their understanding of policy, Staff said “Okay” Policy says MLS is a facility for participants to develop "appraisals, analyses, and other valuations of real property for bona fide clients and customers" – Doesn’t this include CMAs? BPOs? AVMs?

What Is This Issue About? BUT--some MLSs prohibit participants from using IDX- or VOW-specific data feeds to develop Automated Valuation Models Some MLS feeds are inadequate for AVMs MLS Committee has never considered if Participants can use data feeds to facilitate AVMs outside IDX display or VOW, and it is not expressly addressed in MLS policy

What Is This Issue About? NAR MLS policy does not mandate what information MLSs must compile, aggregate or distribute; how information will be provided to participants; or technologies or tools MLSs must use to deliver information Also unclear if existing NAR MLS policy requires MLSs to supply participants with information necessary to develop fully-automated AVMs

What Is This Issue About? January 2014 – Letter received from The Realty Alliance addressing use of MLS data to create "AVMs" for institutional clients using third party software March 2014 -- MLS Technologies and Emerging Issues Advisory Board reviewed request and current policy and forwarded possible recommendation for Committee action

From The Realty Alliance Letter “TRA believes current NAR MLS Policy already permits MLS Participants to use MLS data to create AVMs using third-party software and deliver the AVM results to financial institution end users for a fee separate from any brokerage commission that may be earned on the sale of the subject property… .”

From The Realty Alliance Letter “Since the use of MLS data for this purpose is a permitted use under NAR's MLS Policy, MLSs subject to that Policy cannot effectively deny MLS Participants the ability to engage in this permitted use of MLS data by refusing Participants and their technology service providers to use the MLS' VOW data feed to create the AVMs.”

Policy 7.97 Background Current policy has three options related to reproducing/distributing MLS compilations: Option #1 ensures that only listings a purchaser is interested in are reproduced Option #2 does not restrict reproduction Option #3 prohibits reproduction of MLS compilations in any form

Policy Recommendation That MLS Policy Statement 7.79, Reproduction of MLS Information, be amended as follows: (underscoring indicates additions, strikeouts indicate deletions) Note: Recommendation amends the same paragraph in Options #1 and #2, and eliminates Option #3

Policy Recommendation Proposed Amendment: None of the foregoing shall be construed to prevent any individual legitimately in possession of current listing information, sold information, comparables, or statistical information from utilizing such information to support an estimate of valuevaluations on a particular propertyproperties for a particular clients.

Policy Recommendation Any MLS content in data feeds available to participants for real estate brokerage purposes must also be available to participants for valuation purposes, including automated valuations. MLSs must either permit use of existing data feeds, or create a separate data feed, to satisfy this requirement.

Policy Recommendation MLSs may require participants who will use such data feeds to pay the reasonably estimated costs incurred by the MLS in adding or enhancing its downloading capacity for this purpose.

Policy Recommendation However, only such iInformation that an association or association-owned multiple listing service has deemed to be nonconfidential and necessary to support the estimate of value may not be reproduced and attached to the reportused as supporting documentation. Any other use of such information is unauthorized and prohibited by these rules and regulations.

Policy Recommendation Option #3: Participants or their affiliated licensees shall not, under any circumstances, reproduce any MLS compilation or any portion thereof.

Policy Recommendation Nothing contained herein shall be construed to preclude any participant from utilizing, displaying, distributing, or reproducing property listing sheets or other compilations of data pertaining exclusively to properties currently listed for sale with the participant. (Adopted 11/04)M

Omni Shoreham Regency Ballroom Wednesday May 15, 2014 9:00 am to 12:00 pm

Multiple Listing Policy Considerations