By: Hugh Smith

As part of the NAR Settlement, effective August 14, 2024, BrightMLS will remove the Brokers Cooperation field from its property listings. Instead, there will be an optional “Sellers Concession” field where Sellers and listing agents can communicate, in dollar amount or percentage terms, their openness to requests for Sellers concessions. A Buyer will still have to incorporate their request into the contract offer to purchase. The offer in the MLS is not binding; it is subject to negotiation upwards or downwards in the subsequent contract negotiation.

This attempt by BrightMLS to remain relevant once the offer of cooperation is removed from the listing is controversial. Bright is one of the few MLSs to adopt this strategy. Critics suggest the strategy is an attempted end-run around the Settlement Agreement that will continue to promote the practice of “steering” and leave real estate agents and Brokers who employ it open to liability.

Some listing agents may advocate to their Sellers to offer Concessions as a way of increasing showings and reducing time on market (DOM). On the other hand, some Buyers Agents may not show properties that do not offer Seller concessions. In either case, an argument can be made that these tactics continue the practice of “steering.” The elimination of “steering” is at the heart of the Sitzer v. NAR et. al. class action and is the stated public purpose for the Department of Justice’s (DOJ) continued focus in our industry as well as the NAR Settlement.

Is there a better way? As a thought exercise, I ask you to consider a hypothetical listing presentation. We pick it up halfway in, after the listing agent has pitched his/her value proposition but before tendering his/her pricing recommendation:

• **Seller:** So how much do you charge for your service?
• **Agent:** I charge two and one-half percent for my listing service.
• **Seller:** But what about the Buyer’s agent? We have always offered to pay their commission in the past.
• **Agent:** Well, that’s entirely up to you. Do you want to offer a Seller’s Concession, if so how much?
• **Seller:** Will Buyer’s agents show my house if I don’t offer a concession?
• **Agent:** Of course, they will. Buyers must have a contract with their agent before they show any house. They can always put their request for concessions into their offer.
• **Seller:** Well, what’s the downside of my offering the concession up front?
• **Agent:** Remember in negotiations, “he who speaks last, wins.” Why telegraph up front what you are willing to concede? Let’s say your Buyer has agreed to pay his agent 2%. You are on the record as willing to concede 2.5%. In this case, aren’t you bidding against yourself?
• **Seller:** Good Point. Thank you for being such an astute advisor!

The dialogue above is offered to stimulate awareness and discussion. These changes are coming to our business on August 14, 2024. Time is short. We all have to make individual decisions on how we are going to compete for business in the new compensation model. It looks to me like the “Seller Concession” field proposed by BrightMLS is in the BrightMLS’ self-interest and not in the best interests of our Sellers or in the interests of subscribers. 

I further suggest that agents who quote a 2.5% fee will out-compete those who quote a 2.5% fee and a 2.5% seller’s concession (for a 5% total). Buyers and by extension, Buyers agents have never been shy about asking for closing concessions: there is even an addendum. Why would the addition of a Sellers Concession field change that?

Think about it. Talk with each other about it. Talk to me.

About the Author:

Hugh Smith, ABR, SRS, PSA, RENE, has been a licensed real estate broker since 1983, serving the real estate markets of the Eastern Shore of Maryland, Delaware, and Pennsylvania. He is the Broker of Coldwell Banker Chesapeake Real Estate with offices in Easton, Chestertown, and Chesapeake City, Maryland.

A past President of the Mid-Shore Board of Realtors, the Founding and First President of Habitat for Humanity of Talbot County, Maryland, and a recipient of the Maryland Association of Realtors Community Service Award, he currently serves on the Maryland Association of Realtors Grievance Committee and the Housing Opportunity Committee.