The moves come after a failed effort to amend the Realtor code of ethics last week. This move would have broadened the referrals Realtors are required to disclose to clients. The amendment was widely approved by the full Board of Directors just minutes before
it failed to pass
a vote by a group of local Realtor leaders known as the Delegate Body.
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In an apparent response, the brokerages and even one large Realtor association have issued statements in favor of broad disclosure.“The real estate landscape is evolving rapidly. In response, brokerages and even a large Realtor association have issued statements in favor of broad disclosure.“The real estate landscape In this climate, keeping quiet isn’t an option. Transparency does not only benefit business; it also builds public trust. Inman asked it to provide more information about the changes before Monday’s webinar. However, Exp declined. The firm’s exclusive right to sell or lease form would also include a fee disclosure.
Moreover, a new “Con
The firm’s exclusive right to sell or lease form would also include a referral fee disclosure.
Moreover, a new “Consumer Choice in Your Real Estate Transaction” form will outline the consumer’s right to choose their ancillary providers.
The brokerage also said in its statement that its Full Referral Fee Disclosure would expand referral fee disclosures and give clients added clarity.
James Dwiggins, CEO of NextHome, shared the forms online and applauded eXp for leading the way toward greater transparency.
“To be clear, this is in response to NAR governance failing to pass a rule change to Article 6 of the Code of Ethics to require disclosure of referral fees to clients, as well as the new litigation against Zillow regarding referral fees,” Dwiggins wrote.
Also on Wednesday, Benchmark Realty — which operates in Tennessee and Kentucky — updated its policy on disclosures, effective immediately.
The firm said that all referrals — “whether paid or received” — must be disclosed to clients in writing before or at the time of the referral arrangement. The brokerage stated that they were beefing up their policy as a result of the failure by the Delegate Body to pass a rule change to “Our policy is designed to preserve trust, protect consumers, and strengthen professionalism in the industry.”
The Benchmark Realty policy applies many different types of referrals: agent-to-agent referrals, relocation networks, lead-generation platforms, broker-to-broker referrals, marketing or advertising networks that pay agents, and any third-party provider that provides money or other incentives.
Agents who fail to meet the disclosure requirements face termination from the brokerage, the company said.
In addition to eXp and Benchmark Realty, the California Association of Realtors in recent days also publicly expressed support for referral fee transparency. The organization said it was revising its forms accordingly, which will “make it easier to disclose receipt and payment of referral fees.”
Referral fee transparency remains a hot topic among industry professionals, but overall the changes were welcomed on Wednesday by Summer Goralik, a California-based real estate compliance expert.
“If you’re rolling out new policies and forms, that’s fantastic, I commend you,”
Goralik wrote
. It’s great that you are implementing new policies and forms. I commend you,”
Goralik wrote0100