Overheated Housing Market Prompts MLS Rule Changes
[Note to Readers: The views expressed here are solely those of Ross Kaplan, and do not represent Edina Realty, Berkshire Hathaway, or any other entity referenced. If you need legal advice, please consult an attorney.]
Combine an overheated housing market with seemingly zero inventory, rampant multiple offers, and legions of multiple offer “runners-up,” and what do you get?
Unprecedented pressure from Buyers to see new listings before their competition does.
No doubt that’s what is behind the local MLS’s rule changes, announced last week:
Coming Soon Status:
- Violations of the “No Showings” rule will now also apply to the Showing Agent, with escalating fines for repeat violations:
No showings or open houses are allowed while a listing is in Coming Soon status. Because it is a serious offense, a first violation is a $1,000 fine. Fines double with repeat offenses. Under the newly passed compliance guideline, both the listing agent AND the showing agent will be fined $1,000 for the violation. Both face escalated fines and possible MLS suspension with repeat violations. The status of a Coming Soon listing must be changed to Active before any showings.
- Listing with accepted offer is no longer Coming Soon:
MLS policy now clarifies that if the seller for a listing in Coming Soon status accepts an offer, then it is no longer eligible for Coming Soon status. Within one business day of the offer being accepted, the listing status must be changed to Active (with a noted contingency), TNAS (with a noted contingency) or Pending.
–Northstar MLS Board of Directors memo to Twin Cities Realtors (April 15, 2021).
No More “Sneak Peeks”
Will the new rules — targeting not just listing agents (representing Sellers) but Buyer’s agents, too — deter “early peeks” and other Buyer favoritism?
Given the money at stake, I’m not sure $1,000 will do it (note that serial offenders can be fined much more).
That’s because the payout commission (offered to the Buyer’s agent) on a median-priced Twin Cities home (about $325k now) is almost $9,000.**
**Of course, that’s the gross commission; agents split that with their broker.
See also, “MLS Increases TNAS Fine From $100 to $1,000.”