REINCheck

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VO
You're listening to REINCheck with Andrea Rice, Contracts and Industry Specialist, at REIN where you get the latest member news and information delivered straight from the source, REIN MLS.

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Andrea Rice
Hello and welcome to REINCheck. I'm your host Andrea Rice, and today we are checking in with REIN’s 2023 Board President Jon McAchran and 2023 Board Director Cavelle Mollineaux, and today they're going to discuss some very important changes to rules and regulations. So I'm really excited to have you both here today. The board recently approved all of these rules and thank you for coming and taking time to explain it to our members.

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Andrea Rice
So, Jon, let's start with some of the things that were recently taken out of the rules. So just a couple of really minor things. But the board approved removing a reference to the primary service areas and a reference to a form the Co-op form that's no longer really available. So can you speak to those changes?

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Jon McAchran
Yes, I think REIN previously had the service areas defined and I believe a lot of other MLSs is did this as well to kind of showcase the areas they focused on. And we just after discussing it as a board and discussing it with our attorneys, felt like that was sort of an unnecessary thing to have and the rules and regulations and that, you know, our service area that we focus on is kind of obvious and it just didn't make sense to outline it city by city in the rules and regulations.

00;01;36;00 - 00;01;52;24
Jon McAchran
And with the second one, it was a very easy clean up with the new CIC form. We no longer have the co-op or the condo or the POA. So since it was integrated into one, I believe the other two were previously removed from the rules. But this was just a cleanup to get the co-op one out of there as well.

00;01;52;27 - 00;02;13;23
Andrea Rice
Yeah, so some very basic changes. Nothing big there, just removing the primary service area and the reference to the Co-op form. So pretty easy for what was taken out of the rules. Next, I think we should probably move to what was added. All right. So Cavelle, do you want to go ahead and tell us a little bit about what the board wanted to add to the rules when it comes to artificial intelligence?

00;02;13;23 - 00;02;22;26
Andrea Rice
Because I think that's pretty much like a large part of text that was added to the rules is in reference to A.I.. What can you say about that?

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Cavelle Mollineaux
Well AI is a big topic of conversations, not just with what we're doing here in real estate within this industry, but just in general. And one of the big things is not being able to tell the difference between what’s authentic and what's not. So we wanted to make sure that we are adding the rules that would allow the agents to make sure that they are disclosing pictures

00;02;50;07 - 00;03;25;09
Cavelle Mollineaux
for example. If the pictures is edited in such a way where there might be a pool in the back of the house and there isn’t a pool there right now — trees, landscapes, even things within the house, you know, sometimes buyers, customers will be going in expecting to see, you know, these things. Right. But we need to make sure that we disclose that if that was used so that we at least the agents that are showing the property, knows that, hey, this is not real.

00;03;25;16 - 00;03;50;10
Cavelle Mollineaux
This was artificial intelligence. Right? So it's great for demonstrating what could be, right. But we don't want to be creating any type of false narrative when it comes to putting out a product and things of that nature. And that was very, very big for us to make sure we show that we are incorporating the technology, but we are doing it in a responsible way.

00;03;50;12 - 00;04;12;20
Andrea Rice
Right. Is it my understanding, Cavelle, that really the concern here was not so much with text because a lot of people that's fine to use AI for helping you create maybe a description as long as the description is accurate. So is. But if you're doing it with photos, that's where the bigger concern comes in. Is that correct?

00;04;12;22 - 00;04;40;16
Cavelle Mollineaux
That's correct. I mean, text as well is important, but like you said, even with the text, just like the pictures it’s really about accuracy, right. It’s really about a true reflection of what that property what that environment has at the time, right. We don't want any type of falsehoods. We don't want to have to explain yourself after the fact when you have the opportunity ahead of time to say, hey, this is what it is.

00;04;40;19 - 00;04;59;12
Cavelle Mollineaux
So even in text, a lot of people is doing it. There is the ability to sync different plugins and stuff directly into the AI, into this public remarks, agent remarks and things of that nature. So even with the text, we have the opportunity to make sure that it is a reflection of what's going on. Videos as well too.

00;04;59;12 - 00;05;26;21
Cavelle Mollineaux
There is the ability to create videos about how the property may look for walk through. You know, in this area, a lot of folks do travel in and out due to military, so they will see videos and if is edited in such a way, they might think it's cool. And unless it's being disclosed that this was artificially enhanced.

00;05;26;26 - 00;05;49;06
Cavelle Mollineaux
Right. So videos, text, pictures, anything that is involved in any type of artificial intelligence is very important for this for those disclosures to be there. And for us as a board, we decided to make sure that we let the agents know how important we are looking at this technology and to make sure everyone is doing the right thing.

00;05;49;08 - 00;06;12;07
Andrea Rice
Thank you. And it's always changing, always evolving. But if you take a look at the new rules, you will see that there is a sample for you to follow. If you need to disclose that something was made with artificial intelligence. So pretty clear for you guys and again, you know, the important thing is always accuracy. You're still responsible for the accuracy of the information.

00;06;12;07 - 00;06;31;04
Cavelle Mollineaux
And there's not a really big disclosure. This listing has been artificially enhanced, using AI or using whatever these photos or whatever the case may be. One line, two lines. Just put it out there so everyone is aware of what the situation is.

00;06;31;07 - 00;06;44;22
Andrea Rice
All right. Thank you. Cavelle and so those were the deletions and the additions. But with the addition of artificial intelligence, you know, there were some additional edits to existing rules to kind of incorporate that definition and some updates as well.

00;06;44;28 - 00;07;04;25
Jon McAchran
You've never been able to pull out large amounts of data from the MLS that violates the rules. And with A.I. there’s some technology out there that sort of automates processes like that. So the rule was also clarified to make sure that use of AI to scrape or pull large amounts of data is, you know, continues to be a violation as well.

00;07;04;27 - 00;07;16;03
Andrea Rice
Thank you, Jon. Great information there. And so the next thing we want to talk about is the changes to the offer of compensation. Can you tell us a little bit about the change there and what the board was thinking?

00;07;16;06 - 00;07;38;16
Jon McAchran
Yeah, absolutely. I'm sure everybody's seen the lawsuits and the information out there. The REIN, you know, the board reviewed a lot of different things and information and talked to attorneys and, you know, tried to decide what made the most sense for the members. And when we looked at it, you know, we decided we've always been allowed to put a dollar or a penny in the compensation.

00;07;38;16 - 00;07;59;03
Jon McAchran
You just had to have something. So now we're changing it to where you can do it a zero. So in some ways it's not a major change. In other ways, maybe it is. But essentially, instead of being required to put a penny or above, now you can put zero or above. And it's obviously a conversation with your seller.

00;07;59;06 - 00;08;34;27
Jon McAchran
The seller will decide what makes the most sense based on their situation. So we do have a bunch of new forms that kind of tie in hand in hand with this that we're shooting to have out first quarter. We've been everybody's been working very hard on these forms, kind of tie in to that as well. But this change for the meantime, we just thought it made the most sense to roll it out because like I say, in a lot of ways, it's not a huge change in the sense that you could put a penny in now and now you could put zero in and whatever the seller and the listing agent and listing brokerage decides

00;08;34;29 - 00;08;57;19
Jon McAchran
is the option there. So the board felt it made the most sense to roll this out as soon as possible due to everything going on. And you know, have the most transparency with sellers and make sure that sellers and agents all understood their options to go along with those new forms that are going to be rolling out first quarter.

00;08;57;21 - 00;09;02;03
Jon McAchran
And one of those forms is actually the buyer brokerage agreement.

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Cavelle Mollineaux
Yeah, the buyer brokerage agreement. I could touch on that a little bit. That's always been an important form because, you know, Virginia Realtors, you know, the law recommends that a buyer broker be used when representing a buyer. But typically the buyer broker is something that is individual brokerages will have their buyer broker set up for broker for agents to use within the brokerage. With all the changes that's been going on, I think.

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Cavelle Mollineaux
REIN, as a board, we decided that we will rule out something very strong as an option that can be used as well. So within the forms that we'll be rolling out sometime within the first quarter here there is a buyer broker REIN document. I think one thing that most people will realize is would you say maybe 85, 90% of the forms are optional within REIN?

00;10;04;24 - 00;10;26;13
Jon McAchran
Absolutely. That's a good point. You know, so any of the forms are obviously a brokerage decision unless they're required by law. So, you know, if you're an agent watching this, I would recommend checking in with your broker. But brokerages can choose to use the buyer broker. As you mentioned, they can build their own just as they can with other forms as well.

00;10;26;15 - 00;10;44;28
Jon McAchran
I think, like you said, Cavelle, this is a really great option and there's a lot of great forms that agents choose to use from REIN because they're out there and because there's so much hard work from the SMAC committee that's put in to them. But ultimately it's a brokerage decision. If they want to use that form or if they want to create their own.

00;10;45;00 - 00;11;18;09
Cavelle Mollineaux
I think the reality of it is, is it took some time for us to wrap your mind around these lawsuits, but the consumer and the customer is what's being put at the forefront to have all the options available to them and make decisions that they think is best for themselves and their families. And as a board, we wanted to do our part to make sure that we made the decisions and do what's best as a industry altogether.

00;11;18;09 - 00;11;44;10
Cavelle Mollineaux
So adding that form as an option is just one thing that would help folks have better conversations with their clients about compensation, because compensation is what these lawsuits have been about, right? So the buyers and the buyer's agents having conversation and it's good to have it in writing black and white. So that way everybody's on the same page

00;11;44;10 - 00;12;15;15
Cavelle Mollineaux
starting out. There’s not well, you said this, maybe you said there's no it's spelt out right here. And that's kind of where that's going to be. And obviously we'll touch on what's going on on the seller side, you know, with the listings. And I think that's a lot of the meat that’s on the bones. But still, you know, we are putting the sellers in a position to where they are making a decision on how they would like to compensate both agents.

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Cavelle Mollineaux
You know, within the transaction. And they always have. I think we need to really make that clear. It was always negotiable. Right. But for whatever reason, you know, the powers that may be thought that they need to take it a further step and, hey, the business is changing. We will change with it as a board. We've planned to have several roll outs, several ways to educate the brokers within the industry.

00;12;47;09 - 00;12;57;16
Cavelle Mollineaux
So it's very important that agents lean on their brokers to find out what form is best, how to have these conversation lines and things of that nature.

00;12;57;18 - 00;13;13;18
Jon McAchran
Absolutely. And just like you said, it's all about transparency and making sure that the clients understand their options and helping with the training. So help the agents understand how to better explain all of that and work through this with the clients.

00;13;13;20 - 00;13;35;20
Andrea Rice
Yeah. Excellent. Yeah. Thanks. Thanks for explaining all that. So that a lot about the offer of compensation and how these rules tie in with the upcoming forms release that'll be coming out probably like you said first quarter. But the board a lot of thought, a lot of time went into all of these changes. So thank you guys very much for explaining all that.

00;13;35;23 - 00;13;54;29
Andrea Rice
All right. Thank you, Cavelle Thank you, Jon. And so just one last edit to the rules. There was a statement added to the cover and just touching on what you guys have already covered about, you know, use of REIN forms, checking with your broker. Your broker may have some additional rules in addition to these REIN rules. So always check with your broker.

00;13;55;01 - 00;14;06;16
Andrea Rice
You can view all of the changes that go into effect on December 20th right now on reinmls.com red lines and clean copy. Now, Jon, Cavelle, is there anything you would like to add before we sign off?

00;14;06;18 - 00;14;21;23
Cavelle Mollineaux
Just to touch back a little bit on the lawsuits and the effect or affect that it’s having in the industry in general. I know a form to look forward to that will have some changes to it is the.

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Jon McAchran
I guess there’ll be multiple versions but the listing brokerage forms.

00;14;25;00 - 00;14;26;07
Cavelle Mollineaux
The listing brokerage form.

00;14;26;07 - 00;14;26;18
Jon McAchran
Yeah.

00;14;26;21 - 00;15;04;08
Cavelle Mollineaux
Where in the past it was kind of all together as far as what the seller would pay and the listing firm would pay a portion of that to the selling firm, which I believe. Soon may be changing selling from the buying buyer's agent as well to a buying firm potentially. But we will be looking forward to decoupling that to where it's separate, clearly stating what the seller will be paying to the listing agent and what the seller will be paying to the buyer’s agent.

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Cavelle Mollineaux
Am I right?

00;15;05;13 - 00;15;27;05
Jon McAchran
Yeah, absolutely. I think in practice we're used to seeing authors and closing statements that already have it decoupled and in our minds the sellers paying directly. But this is to follow up with that thought process and decouple it in the listing paperwork as well, where, you know, it's clearly defined. This is the listing side, this is the buyer side.

00;15;27;08 - 00;15;47;01
Jon McAchran
And you touched on something else we want to change, which may take a little bit longer because of the, you know, the time it takes with the forms and everything. But we are also looking forward to hopefully getting rid of the word the term selling firm at some point because of the confusion it creates. And like you said, call it, I'm guessing it's going to be buying firm or something along those lines.

00;15;47;03 - 00;16;03;18
Jon McAchran
So it's very clearly defined. The listing side versus the buying side. And, you know, going back to what we were talking about before with the transparency and the clarity, you know, hopefully there will be no confusion from any clients or agents, etc..

00;16;03;20 - 00;16;06;10
Cavelle Mollineaux
It’s fun terms.

00;16;06;17 - 00;16;28;21
Andrea Rice
Yeah, a lot of great changes, you know. Thank you, Jon Thank you, Cavelle. And really the whole REIN board, I know a lot of time and energy and effort went into these rule changes and like you said, there will be some form changes coming out first quarter. But again, go ahead and check out these rule changes, red lines and full clean copies available now on reinmls.com.

00;16;28;24 - 00;16;43;12
Andrea Rice
I want to thank all of you for taking a listen. If you have not done so already, please go to reinmls.com and subscribe so you get future episodes delivered directly to you when they are released. Thank you and have a great rest of your day.

00;16;43;14 - 00;16;50;27
VO
You've been listening to REINCheck with Andrea Rice. Stay in the know from those who know. Delivered straight from the source, REIN MLS.