Fact Pattern: You are a buyer’s agent with a signed buyer-broker agreement. Your buyer is interested in buying a home in a certain neighborhood. You know that the sellers of 2 MLS listings in that neighborhood have said that they will not pay any compensation to a cooperating broker.

Multiple Choice Question: Can you elect not to share these 2 listings with your buyer-client? Pick the best answer:

A. Yes.
B. Yes, if your buyer-broker agreement says that you will screen out listings with no offer of coop comp from the seller.
C. Yes, if you believe that your buyer will never be interested in buying either of the 2 properties.
D. No. 

Answer: Answer A is wrong. Some commentators say that screening out certain listings based on coop comp is “steering.” But why do we need to figure out if it’s “steering,” when such screening is a direct violation of the MLS rules (that were revised as required by the NAR Settlement Agreement). According to C.A.R.’s Model MLS Rules, MLS participants “must not filter out or restrict MLS listings that are communicated to customers or clients based on the existence or level of compensation offered to the cooperating broker” (see Rule 12.14, available on C.A.R.’s Model MLS Rules webpage (password-protected for C.A.R. members only)). You are required to comply with your own local MLS rules that may or may not be patterned after C.A.R.’s Model MLS Rules.

Answer B is wrong. C.A.R.’s Model MLS Rule 12.14 and the NAR Settlement Agreement do not provide an exception if you and your buyer-client agree that you will screen out listings with no coop comp. It is at least theoretically possible that, despite the MLS Rules and NAR Settlement Agreement, a judge or arbitrator may someday uphold such an agreement to screen out. It’s possible, but highly unlikely, given how the Sitzer/Burnett litigation turned out. The safer approach for you is to just let your client know about the 2 properties. After all, sellers who say upfront that they will not offer coop comp may end up changing their minds anyway.

Answer C is also wrong. Again, C.A.R.’s Model MLS Rule 12.14 and the NAR Settlement Agreement do not provide an exception for properties that you believe your client will not want. Additionally, it’s risky for you to be second-guessing which homes your buyer will never be interested in buying. We’ve all heard the tales of buyers who insisted on buying, for example, a one-story home, only to end up buying something that’s 2 stories.

Similarly, in this situation, you could turn out to be wrong in your assessment of your client’s interests. If your buyer ends up finding out about and/or being interested in either listing with no coop comp, you will appear to have screened them out because you were more interested in getting paid than helping your client.

Answer D is the best answer. In the post-NAR Settlement era, we have no choice but to be very careful with how we handle things. If we can avoid even just the mere appearance of impropriety, let’s go ahead and do that.

Copyright© 2024 Shared Success Center, LLC (serving HomeServices of America companies). All rights reserved. Any unauthorized reproduction or use of this material is strictly prohibited. This information is believed to be accurate as of December 9, 2024. It is not intended as a substitute for legal advice in individual situations, and is not intended to nor does it create a standard of care for real estate professionals. Written by Stella Ling, Esq.