One of the biggest Realtor associations in the U.S. is jumping into the referral debate.
Just days after a group of Realtors rejected a change to NAR’s Code of Ethics that would’ve required more thorough referral fee disclosures, the California Association of Realtors said in a statement on Friday that it supports broad disclosure of such fees and plans to update its forms accordingly.
The 190,000-member California Association of Realtors said it would revise a form next month “to enhance language regarding referral fees and provide a standardized way to make these disclosures.”
“The California Association of Realtors has long championed compensation transparency, especially when it comes to real estate transaction referral fees,” CAR President Tamara Suminski said in a statement. “CAR has always led the way in demonstrating public trust by supporting full disclosure of referral fee arrangements and advising its members accordingly.”
The statement was released just four days after a group of local Realtor representatives called the Delegate Body failed to pass a proposed amendment that would have broadened the requirement for Realtors to disclose certain referral fees to their clients.
The proposed amendment to Article 6 of the Code of Ethics passed the full NAR Board of Directors just minutes before it failed to pass the Delegate Body.
The full board, which is made up of around 900 Realtors, voted 84 percent in favor of making the amendment. The vote required two-thirds of the Delegate Body to vote in favor for the amendment to take effect. The amendment narrowly fell short of the needed votes.
CAR said its revised form has been in the works since before those votes, which occurred at the annual NAR NXT meeting in Houston.
The revision appears to apply to the disclosure of fees by agents who pay for leads from sites like Zillow and Realtor.com.
“The revision will make it easier to disclose receipt and payment of referral fees in compliance with California law and also to provide other disclosures required by the NAR Code of Ethics,” CAR told Inman in a statement.
Suminski said in the statement that clear disclosure of referrals and compensation was necessary for client trust.
“When clients understand whether and how referral fees are involved,” Suminski said, “they are empowered to make more informed decisions, ask the right questions, and confidently evaluate the services they receive.”
