CRMLS CEO Talks New Rules, NAR Settlement and Supporting Buyer Agents

Above, Art Carter

The biggest change coming out of the National Association of REALTORS®’ (NAR) settlement might be most felt by agents, but practically, it is all about the MLS. Starting in July, offers of compensation can no longer be communicated in any way on MLS platforms. That change may or may not have the effects that lawsuit plaintiffs claim it will—namely, lowering overall commission costs for consumers—but it will require significant pivoting by those who manage and work with those platforms.

Art Carter, CEO of CRMLS—the country’s largest MLS with over 110,000 members—sat down virtually with RISMedia yesterday to talk about both the practical changes that will need to be made between now and July, as well as what it all means for the larger real estate community.

RISMedia: You said shortly after the Burnett verdict that many of your members were not even aware of lawsuits and potential policy changes on the horizon. Are people paying attention now, after the NAR settlement?

Art Carter: Yeah, I think the vast majority of them have an understanding, and have varying degrees of opinions on the outcome and what we’re going to be doing moving forward. So a lot of it is now (CRMLS Marketing & Communications Director) Nicole (Aguilar)’s job to educate about the nuances of what went down in the settlement and how to get people comfortable with that.

RISMedia: You also mentioned years ago that the industry needed to specifically prepare for the possibility of having compensation removed from the MLS. Do you feel CRMLS is better positioned now for having previously explored this scenario?

Art Carter: Internally? Yes. If my members had been paying attention as closely as you were, that’d be great. But like I said, the vast majority weren’t even aware that lawsuits were out there. So it’s typical from a communication standpoint. Nicole always struggles with how we get the message out there, and get it down to the levels of people that are boots on the streets.

So that’s the only thing that is disappointing, is that people weren’t paying enough attention, but we’ve definitely got their attention now, and we’ve got four months or so to get all of these changes in front of them. And they’re massive changes. They may not seem massive, but when you see how all of this stuff trickles down into every area of a broker and agent’s life forms, the MLS—there’s a lot of training and education that needs to go on the disclosures that have to be made both to the seller and the buyer side. They’re going to have to get their education in as quickly as they possibly can.

RISMedia: What is the reaction from your members so far? Also, how have they been affected by the misunderstandings and misinformation coming from the mainstream media regarding the settlement?

Art Carter: They’re frustrated with NAR. They’re frustrated with the media. Obviously they’re frustrated with the president, and that’s the new wrinkle that’s come up. A lot of it is that nobody really seems to be speaking on behalf of the REALTORS®. I’ve had so many conversations with people who are unattached to the real estate industry with this assumption that high prices in the real estate market are somehow a result of the commissions being inflated, and it’s not even close to being the case. And I am sure it’s got to be frustrating on NAR’s part because there’s a lot of economists out there that know better, and to hear some of this conjecture—the CNN article that the 6% commission is dead, for instance. The 6% commission has been dead for a long period of time.

There is this idea that the settlement is going to bring new innovation into the real estate industry. Everything that’s being described as being innovative, we’ve had in this industry on and off for the last 30 years. Market conditions always generate innovation and changes in the way that consumers are being serviced, and I don’t see anything being mentioned that is drastically different. The only thing that’s different is that a lot of attorneys made a lot of money, and they get to dictate the future of commissions in the MLS.

RISMedia: There has been plenty of buzz from agents talking or joking about ways to get around the new rules, doing things like trying to sneak commission offers onto the MLS. Do you believe agents will accept the changes, and how will enforcement work?

Art Carter: The circumvention of these rules means the lawsuits return, and if an MLS circumvents them, they lose the coverage and the settlement. If brokers and agents circumvent them, they’re opening themselves up to legal challenges. We still don’t know definitively what the Department of Justice believes about this settlement, and that will go a long way toward us understanding what this landscape’s going to look like.

One of the things that the settlement requires us to do is to police that. So I’ve got some ideas. We will have some of those discussions at (NAR’s midyear convention) with people.

Instead of fighting this so much, let’s embrace this new paradigm that we’ve been presented with and move forward. I get it. I get that nobody likes the decision, but at this point in the game, we lost the lawsuit, the Burnett case, and the settlement has been put together, and we need to move forward in a positive way instead of looking backwards.

One of the things that is a strength in a REALTOR® community is they are a bunch of Type A individuals. One of the weaknesses in a REALTOR® community is they are a bunch of Type A individuals. And they are typically entrepreneurs and don’t like being told how to do their business. But unfortunately, the government has stepped in, lawsuits have changed the dynamic of how compensation is going to be handled going forward, and you can fight it, but I don’t think that it’s going to be a successful endeavor for you.

RISMedia: Are you anticipating a significant drop in the number of active real estate agents and brokers due to the settlement?

Art Carter: Maybe in the short term, but in the long term, no. Real estate is one of those industries that goes through sea change on a regular basis, and the way the business is done now is not the way that it was done in 2000, and not the way that it was done in 1980. Real estate agents will adapt, and MLSs and brokerages will adapt, and there’s still a need. Statistically, more people are using a REALTOR® in their real estate transaction now than they did pre-Zillow and the “internet wars” that started in 2006 – 2007. So it tells me that there’s a value to what it is that they’re doing, and there’s a value to the MLS aggregating and delivering the data on behalf of our brokers and agents that are actively doing business.

RISMedia: How will the role or value of the MLS change based on the settlement? Are you working on ways to help buyer agents offer more value?

Art Carter: We’re in the process of formulating what all of the database changes look like, but buyer’s agents are still going to be able to come to the MLS and get more information. If they have this thought process that, “I’m just going to go to one of the portals and use that to bring my clients in, and then just negotiate the commission afterwards,” you’re probably going to be missing quite a bit of information that will still be available on the multiple listing service—things like closed listings, what they sold for…what buyer’s agents have typically gotten paid in these environments, is something that we believe the MLSs will be able to track long-term better than anybody else as well.

I’ve had some feedback with things like, “Why do I belong to an MLS at all?” But first off, that attachment that you think you’re going to get from the portals—they have no mechanism for you to feed them data other than through the multiple listing service. There’s information that’s still going to be available through the multiple listing service that you’re not going to get out of these other third-party sites, so there’s a wide variety of reasons why the multiple listing service is in everybody’s best interest.

And I said this in a presentation I made a couple of weeks ago. I started going crossways with somebody in the crowd, and I basically said, “You’re embracing a new master that you think is going to be better than the old master, but you have no idea what this new master may do, and what they may take out of you.”

And it’s not to fearmonger at all. But what most real estate agents get out of their multiple listing service and what they pay for it, there’s really no correlation in between the two as far as how much money they can make in real estate, and what they pay for the services that provide them that capability of doing so.

RISMedia: How do smaller MLSs navigate these changes?

Art Carter: Pay attention to (the Council of Multiple Listing Services) and what they’re putting out there. Pay as much attention as possible to some of the things that maybe Bright and CRMLS are putting out there. I will plug us on that side. We do have a division of a company that we started up at the beginning of the year called RECore that is providing solutions for people to bridge these gaps, so I will give an unashamed plug to RECore on that side as well.

Feel free to reach out. I don’t mind my email address ( being out there because this is an ecosystem, and as much as Bright and CRMLS are large, we can’t survive by ourselves, and we are very interested in the MLS ecosystem surviving to the benefit of brokers, agents and the consumer. So at the end of the day, I think that is in everybody’s best interest.

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