First, the Arizona Regional MLS board decided to ignore the National Association of Realtors’ incomprehensible ruling that Google was a scraper site and prohibiting agent and brokerage sites from allowing Google to index listings (which I happen to do on several of my sites.)

And now ARMLS has reversed an earlier decision and eliminated the ability for agents listing short sales to not offer a firm commission as part of the co-brokerage agreement and rather offer 50 percent of whatever the bank decides to allow.

Translated into English … in 99 percent of all situations, buyers agents are compensated by the seller through the listing agent as part of the MLS’ cooperation agreement. As part of that agreement, listing agents must specify what that compensation will be … it needs to be an unconditional offer.

On short sales, it’s not uncommon for the lender to reduce the amount of commission it will allow when approving a sale. Some listing agents decided the solution was to add in the comments that the commission wasn’t what was stated but rather would be 50 percent of whatever the bank decided to allow.

Here’s the basic issue … the bank isn’t a party to the listing agreement and shouldn’t be able to alter the commissions being paid. If a listing agent isn’t able to hold their ground against the bank, at least to my mind, they should take the hit and not suddenly reduce what was supposed to be an unconditional offer of compensation.

ARMLS apparently agrees:

Many MLS organizations have already adopted rule 5.0.1 and depending on the local market situation they may not see the need to reconsider this rule. ARMLS believes that opening this door to allow lenders first, and possibly others later, to influence the business relationship established by and between our participating brokers and their clients is a dangerous precedent to set.

We believe that the unconditional offer of cooperation and compensation is a cornerstone of MLS structure and purpose, and to allow anything less erodes the very foundation upon which this cooperative institution was established. But we do not pretend to tell other organizations how to run their business. We only want the option to conduct business in our market according to the principles to which we and our participants subscribe.

Making adoption of the latter part of rule 5.0.1 optional, rather than mandatory, would allow MLSs like ARMLS, who believe in the sanctity of the unconditional offer of compensation through the MLS, to NOT adopt the latter part of the rule. We would not be forced to allow, much less forced to facilitate, lenders who want to bludgeon agents at the closing table with the club of commission reduction. Anything less than the removal of the mandatory rule is an open invitation to banks, lenders, and other non-Participants to interfere in the real estate brokerage business through the back door, now that the front door has been slammed in their faces.

That was from ARMLS’ motion to allow local MLS to make their own decision regarding the offer of compensation. Local MLS boards since have been given that leeway, leading to ARMLS’ decision:

The outcome of the appeal resulted in the NAR commission rule becoming an optional rule rather than a mandatory rule. As a result, the ARMLS Board of Directors voted in May 2009 to return to the original policy of not allowing any conditional commissions to be offered through the MLS. This includes any field, Remarks or otherwise, as well as any media or attachments to the listing.

A Brief Word on Divorced Commissions

This is the point in the debate where those who favor divorced commissions- sellers paying their agent, buyers paying theirs out of pocket - usually enter the discussion to continue what to date has been almost exclusively an academic debate.

And I’ll dismiss this argument with the simple statement … when the public cares enough to pay for their own representation as buyers out of pocket rather than go without any representation, then I’ll resume the debate.

ARMLS decision does in fact help protect those buyers who have signed buyer broker agreements and agreed to ensure their agent is compensated a certain amount in as much as it takes the guesswork out of the equation. There will be no need to wonder whether the cost of the house is going to rise ever further because of the need to come out-of-pocket even though the listed compensation is the same in the MLS as on the buyer broker agreement. What’s there is there. End of story.

Which makes sense, as there seem to be few businesses where people are expected to work and only learn later what they might earn for their effort.

Kudos to the folks at ARMLS … now if we only could get Active to mean Active 100 percent of the time.

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It’s said the devil is in the details. In the Phoenix real estate market, that’s not only true but you also find the availability of a home’s in the contingencies.

Here’s the simplified lifespan of a real estate listing in Phoenix. When it first comes on the market, it’s Active. When a contract is accepted, it becomes Pending. And when the sale’s complete, it’s Closed. If it doesn’t sell, it’s Expired. If the agent and seller part ways, then it’s Canceled.

Of course, the two classes of homes in which most people are interested - short sales and bank owned homes - rarely follow that simple lifespan. In its place we get to explore the alphabet soup of statuses offered by the Arizona Regional MLS:

AWC-C, AWC-I, AWC-O … Active with Contingencies

AWC-C means there’s a contingent offer on a property - generally speaking, this would mean the buyer has a home to sell but that definition’s been expanded over the years.

AWC-I means the seller has given the listing agent written instructions to leave the listing as active and keep searching for buyers

AWC-O means there’s an existing option to buy on the property. I’m sure this animal is in use, just as I believe there are animals where you see those “Watch for Animals” signs on the highway, but I’ve never seen either.

What’s important to remember with this status is the home’s already under contract. It’s not active inasmuch as an offer made cannot be accepted and only will be held as a backup offer because an offer’s already been accepted.

(Editor’s note: one quirk of the Diverse Solutions search interface in use here is these AWC listings still show as active. The way to find out if another offer exists is to scroll down to the Additional Features section on the Details tab and look for “Contingent”.

If you see it, the property’s actually in an AWC status. If you don’t, it’s really active.)

TOM - Temporarily Off Market

This traditionally was used when the seller decided to take their home off the market while they still had a valid listing agreement in effect with an agent. These days, however, TOM status is used by the REO agents when they’re received a flood of offers and aren’t accepting any more.

In a market where bank owned homes under $200,000 routinely are receiving multiple showings and multiple offers the first day or two on the market, it’s easy to see how this status is being used more and more often.

Have more specific questions? You know how to find us.

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And in a somewhat surprising move, at least to me, the monolith that is the National Association of REALTORS appears ready to change its rules on IDX sites being indexed by search engines such as Google.

There are some subtle tweaks to the current wording but, if approved, the most significant change will be language saying NAR’s rules requiring members to protect their data from scraper sites will not apply to search engines such as Google.

What this means for you, the consumer, is you’ll continue to benefit fully from the IDX feeds on sites such as this one where you can receive far more complete information than on third-party aggregators such as Trulia or Zillow.

Now if we can get NAR to do something about health care … oh well … topple one windmill at a time, I suppose.

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Owner has installed a backyard veranda with a roof in the shape of a human hand …

Photo courtesy of the Arizona Regional MLS.

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Not so long ago, a couple of years max, one of my colleagues with many more years in the business than I said he often wished all of the home data could be removed from the Internet and once again become the sole domain of the real estate brokerage offices.

He wasn’t entirely serious but he was serious enough. And if you spend enough time following the rules of the National Association of REALTORs and the interpretation of those rules you’ll come to discover his somewhat wistful view isn’t unique. In fact, it seems that even now in 2009 NAR is having trouble deciding what to do with technology.

Take the case of Paula Henry, a real estate agent in Indianapolis. Her local board recently issued a cease and desist order because the listings on her site were being indexed by Google. The justification for the C&D was NAR’s Center for Real Estate Technology’s informed decision that Google is fundamentally no different than one of thousands of so-called scraper sites - automated websites that blatantly steal content from legitimate sources.

This rule essentially requires agents to do all they can to protect the MLS data, which us agents disseminate through a setup called IDX, so that the data does not appear on these bottom-feeding sites. Fair enough. But to make the leap of logic and equate Google to one of these sites - in other words, to tell agents to use the IDX but make sure that Google doesn’t crawl the site and index the data - smells of protectionism of the highest order.

It’s a ruling as illogical as it is misguided. Misguided because this data already is being placed in the public domain by third-party aggregators such as Trulia and Zillow. The difference is NAR holds no jurisdiction, holds no hammer over sites that aren’t members of the collective. And so it turns on its own dues paying member to support an antiquated notion - that access to data needs to be severely limited.

Please don’t mistake this for a call for a national or open MLS, ideas I’ve opposed here and elsewhere multiple times the past several years. The various multiple listing services constitute an open system, as long as you have a license and pay your dues. But it would stand to reason than paying your dues and the local boards’ creation of an IDX feed for use of its agents would allow you to utilize that feed.

Except there’s a large portion of the agent population that doesn’t want this information to be widely disseminated. These are the folks who believe the public should come cowering hat in hand to learn the asking price of a home - assuming the agents deign to answer their own telephones. These are the folks who call me on weekends asking for the availability on properties they find on my site because they’re too a) lazy or b) inept to log in to the MLS.

Given that NAR already has watched the horse bolt from the barn by not building a better site and leaving the innovations to start-ups like Zillow and Trulia, it would seem that the organization would be best served by working in the public’s interest and promoting the use of IDX.

One of the flaws of the aggregator sites is that the data’s usually woefully incomplete compared to what can be found through an IDX feed. Serve the public good and give the surfing public a place (or multiple places) to find the more complete data set, help drive traffic and consumers to your members and everyone wins.

The problem is such an idea requires forward thinking, which never has been the strong suit of an organization that was expecting its membership to rally in pride with swelled chests as we watched an NAR float in the Rose Bowl Parade.

Developers are pushing the envelope with the IDX data provided by the local boards, finding ways to provide the same information in more useful forms. For instance, one of my clients loves Diverse Solutions’ addition of price per square foot to the general IDX form - a piece of data not provided via IDX (or even in the general MLS.)

Whatever encourages potential buyer to become actual buyer ought to be encouraged. But it’s not. Instead, it’s punished via a cease and desist order because some other agent would rather cry to mom than try and figure out how to complete here on the Internet.

It’s the oldest paradigm colliding with the new - when you can’t compete, find a reason to prevent your competition from outworking you.

Sad, really. But also not at all surprising.

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