Unserviced listings

Guidelines for boards and MLSs from NAR about "limited service brokers

NAR has received a number of questions over the past year regarding the obligations and rights of MLSs with respect to listings submitted by so-called "limited service brokers," including those that have been referred to as "unserviced listings."

MLS service only
"Limited service brokers" are licensed brokers who offer their seller-clients little or no property marketing services other than submitting the property listing to the multiple listing service. For this service, the broker receives a fee from the seller, which may be paid at the time of listing or at the time of the closing. The listing commonly also provides that the seller will pay a fee to any cooperating broker involved in the sale of the property. Because they do not offer the full range of services that a full service broker would, they have been designated "limited service brokers." This characterization is not intended and should not be understood to demean or be critical of this practice in any way, but only to distinguish the practice from more traditional real estate services that might be called "full service" listings.

MLS may not reject these listings
NAR’s MLS policy requires MLSs to accept listings that under state law are legal, exclusive right-to-sell or exclusive agency listings and that offer compensation to cooperating brokers. By the very nature of the MLS and the MLS rules, submitting a listing for inclusion in the MLS constitutes the listing brokers’ offer of compensation/cooperation to other MLS participants. Thus, unless there is some indication that the broker expressly repudiates the making of such an offer of compensation/cooperation to other MLS participants, the MLS may not reject these listings. In particular, MLS policy does not allow a listing to be rejected on the basis that the listing broker provides only a limited degree of service to the seller, or even no service at all other than submission of the listing to the MLS.

Compensation paid by the seller
It is also inappropriate for an MLS to reject these "unserviced listings" simply because the listing agreement provides that the compensation to be paid to the cooperating broker will be paid directly by the seller, rather than by the listing broker. As noted above, the offer to compensate cooperating brokers is made through the MLS by the listing broker, and the listing broker is obligated to pay, and to arbitrate a dispute over, such compensation. But it is not impermissible, and not a basis to reject a listing, for the listing agreement to provide that the seller will satisfy the listing broker’s obligation to compensate the cooperating broker. Excluding from the MLS listings that meet the MLS requirements described above would present potential antitrust concerns.

Identification as "limited service"
Because cooperating brokers who sell the listings of such limited service brokers may find it necessary to perform duties ordinarily performed by so-called "full service" brokers, however, NAR believes it is lawful for an MLS, in its discretion, to adopt a "disclosure rule" by which the listings of "limited service brokers" are identified in the MLS. Such a rule must carefully describe in an unambiguous way the listings that are to be identified in the MLS as somehow less than "full service" so that cooperating brokers know at the outset that they may have to do more than is "usual." An MLS that wishes to adopt such a rule must thoughtfully consider and carefully define how much less than "full service" listings will be to require such identification. To that end, NAR has developed suggested language for an MLS to consider if it wishes to apply such a disclosure rule. Note that this rule addresses this sensitive question of which listings must be so identified by requiring disclosure of listings where the listing broker will provide essentially no service other than submission to the MLS:

Any listing with respect to which the listing broker is not obligated to provide, and will not be providing, any "substantial services," as defined herein, must be designated by the code "LR" ("Limited Representation"). Use of that code serves only to distinguish such a listing from other listings with respect to which listing brokers will provide substantial services, regardless of whether the listing is an exclusive agency or exclusive right-to-sell listing. For purposes of this rule, the term "substantial services" includes, but is not limited to, the listing broker’s participation in presentation of offers to purchase the listed property to the seller, the seller’s consideration of such offers, or the seller’s making any counteroffers.

The above language is only meant to serve as guidance and is not mandatory NAR policy. Of course, the first hurdle these listings must clear is that the listings are legal exclusive right-to-sell or exclusive agency listings under state law. If a listing fails to meet the requirements of state law, then it should be rejected by the MLS.

Reprinted with permission from The Letter of the Law, ©National Association of REALTORS^®.

To sign up for the One REALTOR Place list serve:

1) Log on to www.onerealtorplace.com (password required) and click on Comm Center in the upper left part of the page;

2) Click the Get Personalized Info link;

3) Following the prompts, select the list serve topics about which you would like to receive weekly e-mail updates.

Call NAR’s Info Central at 800/874-6500 if you have any questions.

Back to top

Buyers & sellers, visit www.texasrealestate.com.
REALTORS®, visit www.tar.org.