NWMLS Rolls the Dice

Their latest move is not lacking in courage...

I spent an evening thinking about the latest move from Seattle-based Northwest MLS (NWMLS) — one of the largest broker-owned non-REALTOR MLS in the country. I am in awe of their courage, while scratching my head wondering what they’re thinking.

In case you missed it, the story was big enough to be picked up by mainstream corporate press. From the Seattle Times:

The Northwest Multiple Listing Service, where thousands of Western Washington real estate agents share information on properties for sale, will not opt into a national settlement that brought new attention to agent commissions this year.

Not only is NWMLS not opting in to the NAR Settlement, they are defying what appears to be the accepted wisdom:

In announcing its decision not to join the settlement, the NWMLS argued that removing commission offers from home listings hurts transparency and could lead to “deceptive practices.”

“That change is a step in the wrong direction and is detrimental to consumers and brokers alike,” the organization said in a statement. 

“NAR’s removal of compensation transparency from the MLS pushes consumers and brokers to make secret deals off MLS, inviting deceptive practices, discrimination and unfair housing,” the statement said. “Depriving buyers of information about the transaction risks harming buyers, especially those buyers who are already disadvantaged, including first-time home buyers and members of protected classes.”

Preventing sellers from including their offer of pay for the buyer’s agent “also unnecessarily restrains the seller’s choice and absolute right to offer compensation to a brokerage firm representing the buyer,” the statement said.

I think this is a very interesting step, and one that will be watched by other MLS execs, Association boards, NAR and lawyers. I haven’t spoken to anyone at NWMLS for this, so much of what follows is speculation. But then, that’s kind of my specialty: informed speculation.

I think it’s worth making a steel-man case for NWMLS’s argument, and thinking about what the counters might be. Even if you’re not in NWMLS and not in the Seattle area, it’s worth thinking about.

Let’s get into it.