Zillow's Ultimatum: No Delay or No Display

Zillow's bold stance against NAR's new policy allowing limited public marketing. Plus, answers to the toughest questions REALTORS® have raised over the past six months about navigating the new broker compensation rules.

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Transcript

Zillow’s ultimatum: No Delay or No Display

© 2025 by Hawaiʻi Association of REALTORS®. All rights reserved. 

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 Honolulu, HI 96817
 Phone: (808) 733-7060. 
 Email: har@hawaiirealtors.com

Introduction

Hello and aloha! I’m Jason Korta, the Hawaiʻi Association of REALTORS®’s staff attorney, bringing you the latest episode of the Hawaiʻi Real Estate podcast. On today’s podcast, the insider story on a big change that just rolled out from the National Association of REALTORS®. We’re diving in and giving you the skinny on a new option for sellers that’s creating buzz from Honolulu to Hanalei. 

And trust me, this isn’t your run-of-the-mill rule change; it’s a story of rule-bending and rule-making, of brokerages angling for advantage and tech giants like Zillow drawing lines in the sand. It’s got a bit of everything: a dash of drama, a sprinkle of strategy, and implications for every Hawaii real estate pro and consumer. So let’s unpack in true island style—with insight, a little humor, and the real story behind the headlines. 

Delayed Listings

Clear Cooperation Policy Refresher 

First, let’s set the stage. Five years ago, NAR introduced the Clear Cooperation Policy, or CCP, to curb so-called “pocket listings”, a practice where agents quietly shopped to an exclusive circle of buyers, keeping them deliberately hidden from the broader market. Under CCP, if a listing agent publicly marketed a property – a yard sign, a Facebook post, an email blast to multiple brokerages, anything public – then that property had to be submitted to the agent’s MLS within one business day so all MLS participants could see it—all REALTORS® could see it. The idea was to ensure a level playing field—every REALTOR® would have an opportunity to see every listing that had been publicly marketed listing in one place: the MLS; and every buyer could learn about these listings from their agents, who had direct access to the MLS, or through public real estate search on a site like Zillow, Homes.com, or Realtor.com, or any other of those sites or brokerage websites that get their listing information from the MLSs. 

Sounds great in theory, right? 

But in practice, CCP ruffled some feathers. Some brokers – especially brokers at boutique brokerages specializing in high-end clientele – they weren’t thrilled about losing the ability to do hush-hush pre-marketing. Zillow, though, which relies on MLS data to upkeep its site, was thrilled that every property that was publicly marketed, even if only to a limited audience, would have to be in the MLS and, therefore, in Zillow users to find in 24 hours. 

Fast forward to today . . . . After spending many months listening to all those with a stake in the real estate business (MLS execs, brokers big and small, agents, tech folks, fair housing experts – everyone), the National Association of REALTORS® announced on March 25, 2025 that it was creating an exemption to its rule that all properties be listed on an MLS within 24 hours of being publicly marketed. The exemption, announced as part of NARs “Multiple Options for Sellers” policy, was called the “delayed-marketing exemption”—and it is has caused quite the stir.

New Exemption for Limited Public Marketing

So, what is a delayed listing? In plain English: it’s a listing that goes on the MLS, but experiences a period of limited public marketing before the MLS feed blasts it out to the public writ large.

A seller directing their agent to market their property as a delayed listing is essentially instructing their agent to list their home on the MLS for agents to see, but to hold off on marketing that listing to Zillow, Redfin, Realtors.com, Homes.com, and other real-estate search websites and brokerage websites for a short period. 

Importantly, the seller’s listing brokerage can continue to market the seller’s home during this limited public marketing period. NAR’s delayed marketing exemption expressly states that sellers and listing agents are free to market the seller’s listing during this period, “in a manner consistent with the seller’s needs and interests.”. 

In practice, that means a listing agent offering a high-end condo in Kaka’ako as a delayed listing can put up a “For Sale” sign, email their brokerage’s client list, or scream from the top of the Pali: “I’VE GOT THIS CONDO FOR SALE!”, and only those who see their sign, read their email, or hear the echoing call will know about the listing. That’s because, although the property is listed within 24 hours of your sign, email, mountaintop broadcasting, or other public marketing, the MLS feed won’t carry the listing to the outside world until your early limited public marketing period expires. 

How long can this limited public marketing period last? NAR decided not to impose a one-size-fits-all limit from Chicago HQ. Instead, each local MLS will have the discretion to set the allowed delayed-marketing period locally. NAR’s President, Kevin Sears, specifically said they’re encouraging MLSs to talk with brokers and stakeholders to figure out what works best for each market before the September 30th implementation deadline. So, in Hawaiʻi, our HI Central MLS, the MLS for Honolulu, might decide that your Kaka’ako listing need not be blasted out to Zillow and the like for 14 days; whereas, RAM, the MLS for Maui, might decide that a longer exempt period is warrened—say 30 days—is appropriate for its market. HIS, the MLS serving the Big Island and Kauai, might determine that yet another exempt period is appropriate for those markets. This local flexibility was deliberate: one size might not fit all—Hilo might not match Manhattan. 

Now, although the exempt periods may vary from market to market, it’s important to note that no exempt period will be infinite. A property that didn’t sell before its exempt period expired cannot be recycled. Listing agents cannot stack exempt periods on top of each other to orchestrate one ceaseless exempt period. When the property’s exempt period expires, it expires—the property gets one shot at the exempt period before the MLS transmits info. to the wider world, including Zillow and other brokerage’s websites. 

Another important point to note: A seller who opts for delayed marketing has to sign a written disclosure acknowledging they understand what they’re doing. Basically the client must give informed consent saying, “Yeah, I know I’m waiving the immediate exposure on public sites, and I still want to do it.” NAR wants to ensure sellers don’t inadvertently miss out on the benefits of full marketing without realizing it. A standard form disclosure you can use is being worked on, but I imagine it will be similar to disclosures given to clients who decide to do no public marketing at all and decide, instead, to only make their property’s availability known to the agents who work for their listing agent’s brokerage, a so-called “office-exclusive” listing.

By the way, don’t confuse the two. An “office-exclusive listing” and a “delayed-marketing listing” are different. 

An office exclusive, which some brokers have for years, which some brokers have for years used, means the property is never listed on the MLS – it’s only shared within the listing brokerage, there’s truly no public marketing at all. Only agents that work for the listing brokerage see the marketing.  

By contrast, a delayed listing is publicly marketed, and its entered into the MLS within 24 hours of that marketing so that other REALTORS® searching the MLS can see it. Really, the only difference between a delayed listing and a traditional listing is that the delayed listing enjoys a period of limited public marketing before the MLS blasts its info out to the world. There’s a time when the listing agent can advertise the property to limited public segments before the entire world, like those searching on Zillow, Homes.com, or Realtor.com see it. 

A delayed listing is like a movie that has a special early screening for insiders before its nationwide premiere. During that exclusive preview period, only a select audience – in this case, MLS agents and their clients – can see the ‘show.’ Later, the film (the listing) releases to the general public on sites like Zillow. The early showing builds buzz in a controlled way without excluding the people ‘in the industry’ who need to know about it. 

An office exclusive, by contrast, is more like promoting a movie by inviting your co-workers over to your cubicle to watch it. Everyone outside your office is oblivious that the fact that the film exists. 

Limited-Public Marketing Advantages 

Now, you might wonder – why would a seller choose to limit their advertising. Isn’t maximum exposure always better? 

Often yes – most sellers do benefit from casting a wide net. More buyers usually means a better chance at top dollar. But there are legitimate reasons some sellers might prefer a slower reveal:

• Privacy and Control: Think high-profile or high-end sellers common in Hawaiʻi’s luxury market. Celebrities, affluent owners, or just private folks might not want their home splashed all over the Internet right away. Imagine a famous surfer selling their North Shore beach house – they might dread a circus of looky-loos. A delayed MLS listing lets the agent quietly seek likely buyers without a public frenzy at first. It’s selling by invite-only, at least for a short time.
• “Soft Launch” to Gauge Market Reaction: Like that move with a special early screening period, a delayed-marketing exempt property allows a listing’s seller and their listing agent to gather a little feedback or early interest. If not agents in two weeks contact you, maybe that’s a signal that your client’s listing’s price is too high—better to know before you trumpet it everywhere. On the flip side, if the listing gets tons of inquiries, you and your seller might be properly emboldened—for you two, it’s a white hot market. The property’s ready to sell now, high. 
• Stopping the Days-on-Market Counter: Sellers often rightly worry about their home sitting on the market for too long. Homes listed on the market for too long look undesirable. Like in life, generally, age can be a stigma. Depending on how your MLS works, though, a delayed listing could offer you a way to avoid that stigma. Some MLSs might decide that their days-on-market clock won’t start for properties until they exist that initial limited public marketing period. If your MLS makes that decision, then your property could get a few days off market for free. The time it spends in limited public marketing wouldn’t count towards its days-on-market figure. 

For brokers, delaying full public marketing can also be seen as an opportunity to take back some power from the real big real-estate search websites. There’s been a growing sentiment (almost a rebel streak) among some brokers that, that they’re tired of handing their listing data over to Zillow, only to buy them back in the form of leads. As one frustrated agent put it, real-estate search websites, “take our data and sell it back to us at an extortionate cost.” Delaying syndication could, in theory, limit that abuse – at least for a while – and let the listing agent try secure the best buyer for their client while also avoiding paying for a Zillow lead.

Zillow’s Pushback 

Unsurprisingly, Zillow is pushing back against the delayed-marketing exemption. 

It wasted no time staking out its position. About two weeks after NAR announced its new delayed-marketing exemption, and thus creating an avenue for listing agents to publicly advertise their client’s property to a targeted audience before it can be found on Zillow, Zillow announced its own new policy:  “Listing Access Standards” for their platform – essentially a policy that echoed NAR’s old Clear Cooperation Policy, before the delayed-market exemption. Under Zillow’s new “Listing Access Standards,” if you publicly market a listing anywhere, you must get it on an MLS data feed – and thus on Zillow – within 24 hours of the property’s first publicly marketing—no delayed marketing exemption. Zillow gets the data right away. 

Zillow’s taking a strong stance – some call it aggressive. Perhaps it shouldn’t be surprising. Its whole business is showing every home available. If agents start withholding listings, even temporarily, Zillow’s consumer experience could suffer. So, starting next month, any publicly advertised listing that was withhold for even the shortest period MLS feed that populates Zillow’ listing will be barred from being shown on Zillow. In essence, Zillow is saying: We don’t care if NAR allows a delay – if you actually advertise that home in any public way during that delay, we expect it to be on Zillow within 24 hours.” 

Redfin has joined the cause. Its CEO, Glenn Kelman, recently announced that Redfin will refuse to display any listing that experienced a limited marketing exempt period before being blasted out to the public through the MLS data feed. 

We don’t know exactly how Zillow or Redin will enforce their new policies (they can’t monitor every yard sign), but they might rely on MLS data and agent reports to identify offenders.

Interesting, though, major real-estate search website aren’t moving in lockstep against NAR’s new limited-marketing exemption. 

Homes.com, prominent real-estate search website and up-and-coming rival to Zillow and Redfin, has recently sided with brokers, agents, and all sellers who value having a limited public marketing option. In a letter recent letter, its CEO, Andy Florence, described argued that Zillow was “overplaying its hand” and described its new policy against limited public marketing markets as “self-serving,” a thinly veiled power play to protect Zillow’s ability to sell leads from MLS listing data.  

Florence promised that Homes.com will remain “agent-friendly” – implying they will display listings, even if they experienced a limited public market for a period before being released to Homes.com. 

So now we have a bit of a showdown: Zillow, Redfin, and the likes -- versus – Homes.com, boutique brokerages, and all other brokerages, agents, and sellers who value having a limited public marketing option available without penalty. 

For Hawaiʻi’s real estate community, this tension is not just theoretical. We have a unique market with a strong local brokerage presence and also a strong reliance on out-of-state buyers who often start their search on large real-estate-search websites like Zillow. It’s a delicate balance. 

Agents will need to educate their sellers: “Yes, we can keep your listing semi-private for short period,” you might say, “to guard your privacy and gauge the market, as you wanted, but if that’s the road we take, Zillow and Redfin will likely never display your listing.” Sellers will have to weigh pros and cons, ideally with guidance from expert REALTOR® who is closely connected to the market. 

The DOJ’s Watchful Eye

No good real estate policy discussion these days is complete without checking if Uncle Sam is looking over your shoulder. Indeed, the U.S. Department of Justice (DOJ) has been interested in NAR’s rules, including the Clear Cooperation Policy, from an antitrust perspective for years. The DOJ had issued several civil investigative demands about CCP in the past and famously withdrew from a proposed settlement with NAR in 2021 in order to keep probing industry practices. 

So, how does the DOJ feel about this new NAR’s new delayed-market exemption? 

You won’t find an official statement on its website, but very recently—in fact, last month, the same month that NAR announced its delayed-marketing exemption—the DOJ filed a brief in a federal antitrust matter being filed litigated in Massachusetts. In its court filing, the DOJ clarified that it had not taken a position on whether NAR’s Clear Cooperation Policy is anticompetitive. They basically told the court, Hey—there’s been a lot of chatter out there lately about NAR’s Clear Cooperation Policy and its new exemption to it for limited public marketings. Some have said that its our position that CCP is illegal—that’s not true. Basically, the DOJ is giving the side-eye to anyone attempting to use the DOJ to support their position for or against the CCP or the new limited public marketing exemption to the CCP. 

Our best guess is that the DOJ won’t act anytime soon against the new limited public marketing exemption. DOJ has challenged NAR on several fronts recently, but given their recent court filing confirming that they have not taken a position on CCP, it would be surprising—astounding, really—to see them suddenly swoop down and try to smack around exemption to something it hasn’t taken a position on. NAR’s new allowance for limited public marketings, therefore, is likely safe in the near term from DOJ attack. 

Final Thoughts: Adapting to New Opportunities

The delayed listing’s introduction is a reminder that the real estate industry is constantly balancing between cooperation and competition, between openness and exclusivity. 

REALTORS®, especially here in Hawaiʻi, want to do their best for their clients, which sometimes might require offering a tailored approach, like a limited public marketing, but they are also members of a broader cooperative marketplace that functions best when information flows freely. This new policy attempts to thread that needle. It empowers sellers and listing agents with more choice, while still keeping the basic structure of the MLS intact so that buyers and their agents aren’t left in the dark. 

For Realtors®, it means a bit of new learning and diligence. Each REALTOR® must train one eye on their local MLSs, as it decides the maximum limited public marketing period in their market, and their other eye on Zillow, Redfin, Homes.com, and others who may seek to punish or offer a refuge to agents who limit a property’s public marketing.  

Bonus: Broker Commission Rules Revisited Six Months After Implementation 

Normally, I would be closing out the show at this point, but today we have a special. 

Earlier this month, the Hawaii Association of REALTORS® and its Legal Kokua program offered a webinar for certain select members. That webinar previewed coming changes to the standard forms that the association offers its members to conduct their real estate business, and was scheduled to also provide a lookback at how the industry has changed since broker compensation rules were introduced last August. Time constraints prevented much of that second topic form being discussed, and so we give it here. Enjoy. 

Introduction

Imagine having to sign a contract just to walk into an open house. It sounds surprising – almost like needing a ticket to window-shop. Yet in Hawaiʻi’s real estate market of 2025, this scenario isn’t hypothetical. Six months ago, a set of industry rule changes quietly rewrote the playbook for REALTORS®. 

That casual Saturday stroll through a for-sale home now can come with a small but important formality. Before you turn the knob and say ‘let’s take a look,’ there’s likely a pen-and-paper (or e-signature) moment. 

The REALTOR® compensation rules that went into effect last August in Hawaiʻi ushered in a shift in tradition – one that’s left some agents anxious and some clients scratching their heads. But we’ve learned quite a bit since last August. 

Over the past half year or so, our Legal Kokua Line has received requests for general guidance from hundreds of members operating under the new broker compensation rules. We’ve compiled what we’ve learned from those calls into one story that hits on some of the most common comments, questions, and concerns articulated by our members in the thick of it, including: 

·       At what exact moment is a buyer representation contract required? 

o   Can a listing agent at an opening house, for instance, show an unrepresented buyer around without one?  

o   What if it’s a virtual showing? 

·       Help! The commission my buyer guaranteed me doesn’t line up with the amount the seller is willing to pay. 

o   What to do when the seller offers more than your buyer guaranteed. 

o   What to do when they offer less.  

·       What to do when the seller or listing agent ask to see written buyer representation contract. Do I say, “no”? Can I confirm it without forking it over. Is there a way to show only part of it? 

·       How are commission offers being shared now that the MLS can’t show them? Where can I find them? How do I ask for them. 

Really, we’ve received hundreds of calls. Benefit from our exhaustion. Learn from the experience of those who have called us. 

What follows is a story involving Malia, a local buyer, Kai, her trusted agent, and a lively chorus of other agents—all navigating these new challenges together in our unique Hawaiʻi market.

When to Sign the BRC

Kai is a REALTOR® setting up for a Sunday open house in Kaimuki, a Honolulu neighborhood that refuses to fit neatly into any postcard. 

Not long after the sign-in sheet is out, Malia wanders in. She’s a first-time buyer, curious and unrepresented. Kai greets her warmly and lets her explore the charming three-bedroom listing. In the back of his mind, he recalls the new rule about buyer representation contracts (BRCs) – the one that caused a stir among agents last August. It says that a written buyer representation contract must be in place before any buyer a REALTOR® is working with tours any home. 

But as Kai shows Malia around, he knows no contract is required yet. Why? At this moment, Malia isn’t technically his client. He’s the listing agent doing his job to present his client’s home for all possible buyers. Malia is essentially a visitor. No agency relationship, is created no private tour arrangement, and no contract needed. Kai isn’t “working with” her in the legal sense, so there’s no need to awkwardly pause the open house and shove a contract in her face. He just makes sure she enjoys the tour as a friendly host, not her representative.

Malia loves the house’s ocean view, but it’s out of her price range. As she’s leaving, she lingers at the doorway and then asks Kai that question that every agent loves to hear: could he help her find something similar within her budget? 

In that moment, Kai mentally shifts gears – Malia is asking him to become her agent, to work with her to find a home. If he agrees to work with her as her agent, he’ll be her representative in her search for a home. Kai smiles and says he’d be happy to help. They exchange contact info and plan to see a new listing in Makiki the next day. 

The next morning, Kai meets Malia at a coffee shop to go over the buyer representation contract. Malia furrows her brow and asks, “Do we really have to sign a contract before you show me this condo?” It’s a fair question, one many buyers are asking lately. Kai nods and breaks it down in simple terms. “Because of recent real estate rule changes,” he explains, “I need to have a written agreement to represent you before you tour a home. Basically, these new real estate rules say I can’t take you to see a house as your agent until we have a written representation agreement in place.”

He assures her it’s not a long-term ball-and-chain commitment – it’s standard for all REALTORS®. 

Seeing Malia’s curiosity, Kai elaborates, “Up until yesterday, we were just chatting. You hadn’t hired me, and I hadn’t agreed to represent you. We weren’t working together. You didn’t authorize me to represent you just by walking in the open house.” 

He then moves on to clarify that this isn’t about browsing listings online or chatting on the phone--“When I say I’m going to give you a tour,” he says, “I mean we’re going to walk through a home in person so you can really see it. It’s the act of showing a property – unlocking the door, stepping inside, pointing out the granite countertops or that new roof.” 

Malia nods, thinking of how different it feels to walk through a house versus just scrolling through some photos online. 

But then Kai adds an interesting tidbit: even a video-call walkthrough counts as a “tour” in the spirit of the rule, so long as someone is physically at the property. 

That’s true. If Kai went to a condo in Waikīkī and walked Malia through it over FaceTime, that’s essentially a tour because he’s there on-site guiding her remotely. By contrast, if he just emailed her a link to a virtual 3D-home tour and neither of them set foot on the property, that wouldn’t meet the threshold. The idea is that a tour involves real-time access to the property, as if the buyer were there in person with their agent. That’s the second condition: a bona fide property tour, not just window-shopping from afar.

Finally, the third, “home.” The rule isn’t triggered by touring just any piece of real estate – it specifically says, “home.” Kai explains that for these purposes, a “home” means a residential property. “Think houses, condos, townhomes,” he says, “places people live ”. “A single-family house? Definitely a home. A condo unit or a townhouse? Those are homes too. A duplex or triplex, even a four-plex – as long as it’s residential (typically four or fewer units in one property) – yeah, that would count as a “home” under this rule. 

But if Malia wanted to go see a commercial property, like a store for sale or a warehouse, that wouldn’t be considered a “home,” obviously. Same goes for agricultural lot or farm land, or an industrial plot – those fall outside the “home” category. In those cases, the new rule wouldn’t force them to sign a buyer-broker agreement before a showing (though Kai or his brokerage might still prefer some form of agreement for clarity, it just wouldn’t be mandated by this particular rule). 

Malia, ever the inquisitive client, poses a hypothetical: “What about vacant land? Say I find an empty lot – is that a ‘home’ we’d need a contract for?” Kai grins, appreciating that she’s thinking it through. “That’s a great question,” he replies, “If it’s just raw land with no zoning for residential use – like a plot zoned for agriculture or a commercial development – then no, it’s not a “home.” But if it’s vacant land zoned residential, meaning you could build a house on it, then yes – the rule likely treats that as a home. We’d need the contract before touring it, because essentially it’s a future home site.” In other words, the spirit of the rule is to cover anything that functions or is intended to become someone’s dwelling. Condition three, met: the property on today’s agenda – a two-bedroom condo – squarely qualifies as a “home.”

With those definitions clear, Malia feels more comfortable. She realizes the BRC isn’t just red tape for its own sake, but a way to ensure everyone is on the same page when an agent is truly acting as her representative on home tours. The contract itself is straightforward – it outlines that Kai will represent Malia, how he gets paid (and that she isn’t on the hook for a commission if the seller’s agent is offering one), and the basic terms of their working relationship. There’s transparency and commitment, which ultimately benefits both sides. Malia signs the BRC, and Kai countersigns, making their partnership official. Paperwork done, they hop in their cars and caravan to the Makiki condo.

As Kai opens the door to the unit and lets Malia step inside, he feels confident that he’s checked all the required boxes. More than that, he’s given Malia a quick education on a crucial new rule without scaring her off. Malia, for her part, appreciates the professionalism. Instead of feeling burdened by “one more form,” she now understands why this step is there. It protects her interests and clarifies the relationship. In a competitive market, that clarity is a good thing. All three conditions – agent relationship, a tour, and a residential property – were met, so they handled the contract upfront. By signing on before showing, Kai and Malia can now focus on finding that perfect home, knowing they’re both protected and on the same team from the get-go.

Minding the Gap – When Commissions Don’t Match

Fast forward a few weeks. After several showings (all properly preceded by that BRC, which Kai now carries like a prized possession on his tablet), Malia falls in love with a charming two-bedroom cottage in Kaimuki. Kai is thrilled – there’s no better feeling than helping someone find “the one.” They sit down to write an offer. Because Kai is thorough, the first thing he checks is the MLS info for agent commission… except now the MLS sheet is oddly silent about that. Remember, one of the rule changes from last August is that MLSs no longer display the buyer’s agent commission offer. In the old days (basically any time before last fall), Kai would see something like “Buyer’s Agent Commission: 2.5%” right there in the listing. Today it’s not even a field anymore. 

Kai actually knew the offered co-op commission on this cottage because the listing brokerage had blasted out an email to local agents: “New Listing: 2% to buyers’ brokers.” If that email hadn’t hit his inbox, he’d be on the phone asking the listing agent, “Hey, just checking, how much is the seller offering in compensation?”. This is the new reality – commission info is shared off the MLS (more on that in a moment), and buyer’s agents have to proactively seek it out. 

In this case, that little detail sets up a potential problem: Malia and Kai’s BRC says that Kai’s guaranteed a 3% commission, but the seller is only offering 2%. There’s a 1% gap. How is this handled?  

In years past, some agents might have just shrugged and hoped something could be worked out later (or quietly taken the hit to make the deal happen). Not anymore. The new rules – and HAR’s standard forms – anticipated exactly this scenario, and the solution needs to be decided upfront. 

Kai sits down with Malia to discuss the issue openly. He explains that, “Our agreement says that my commission for this transaction is 3%. The seller is only offering 2%. That missing 1% has to come from somewhere. We have a couple of options here.” 

Option 1: Ask the seller to cover it. When drafting the purchase offer, Kai can include a term that the seller will pay 3% of the purchase price to the buyer’s brokerage at closing. There’s actually a dedicated blank for this in Hawaii’s standard Purchase Contract (section C-4, if you’re curious, and it’s labeled “Seller’s Direct Compensation to Buyer’s Brokerage”). It’s effectively saying, “Dear Seller, pay my agent 3% of the purchase price.” 

Kai writes into the offer: “Seller to pay buyer’s brokerage 3% of purchase price at Closing” This way, if the seller accepts the offer, voilà – gap covered. Malia still gets the house at the price she offered and Kai gets his full 3% commission—everyone’s happy. 

They go ahead and try this approach first. 

But real life can be less than accommodating. Suppose the seller balks – maybe other offers on the table that don’t require a 3% commission, and the Seller doesn’t want to pay the cooperating broker commission at 3%. So the seller counters—Seller will only pay Kai’s brokerage 2%. 

Now we’re at Option 2: the buyer covers the shortfall. Under the terms of the BRC, Malia guaranteed Kai a 3% commission. If the seller is only offering 2%, Malia must pay 1%. 

It’s not the news any buyer loves to hear – “you might have to pay more out-of-pocket to make up my fee” – no, they don’t want to hear that, but it’s part of the new reality. Kai reminds Malia that, under the BRC they signed, she guarantee him a 3% commission. If the seller won’t pay the whole thing, Malia must make up the difference. 

Malia takes a breath and considers all this. She really wants the house, and she values Kai’s help. Maybe Kai can negotiate a closing cost credit to offset the 1% she’s owe him at closing, or perhaps she decides the house is worth every penny and signs the purchase contract right away. Either way, everyone is clear on where that missing 1% will come from if the deal is to move forward—no surprises. 

There’s also Option 3: the broker (Kai) adjusts his fee. Nothing in the new rules says a buyer’s agent must rigidly stick to the original commission amount if circumstances change. Kai has the freedom to say, “You know what, I’ll take 2% on this one and waive the extra 1%.” Maybe Malia is a close friend or a repeat client, or perhaps Kai sees she’s stretching her budget thin and decides it’s better to make the deal happen smoothly than insist on every last dollar. Under the new rules, any change to the compensation agreement must be put in writing. So Kai would draft an amendment to the BRC, signed by both, saying his fee is now 2% for this purchase instead of 3%. 

Importantly, the commission they agree to in the amendment can’t be an open-ended (e.g., “I’ll take whatever the seller gives” amendment) – it has to state Kai’s new commission as a clear, objective number or rate (2%, for example, or $20,000), no open-ended or vague terms—a strict number or rate. 

By adjusting his commission down a percent, Kai could earn goodwill or save the transaction, but he’d be essential cutting his own paycheck. Some agents, given the amount of value they bring to a transaction, would not be willing to do that—and that’s just fine. 

But in our story, let’s say Malia and Kai agree to split the difference. The seller won’t pay more, and Malia is hesitant to pay the entire 1% herself. Kai really wants her to get this house (and let’s be honest, he wants to close the deal too), so he offers, “I’ll reduce my commission to 2.5%. I’ll eat half of that gap if you can cover the other half.” She agrees, and they amend the BRC to state that Kai’s total compensation for the deal is 2.5%. 

Malia is relieved. Home sweet home is on the horizon for her. 

Now, before we leave this topic, flip the script for a moment. What if the opposite happened – a commission surplus? 

Imagine the cottage’s seller was unusually generous and had offered 3.5% to the buyer’s agent (perhaps to incentivize a quick sale), while Kai and Malia’s BRC said 3%. Can Kai just pocket the extra half percent?

No. Absolutely not. The new rules are clear. I’m sorry--Kai has two choices. 

(1) reduce his take and only accept 3% or 

(2) Amend his BRC with Malia’s to allow him to receive the higher commission. 

If the BRC is amended to increase Kai’s commission, Kai would have to give Malia something for receiving that extra commission, otherwise the amendment isn’t effective. For example, if he really wanted to keep that extra 0.5%, he might offer some added service or concession to Malia and get her to sign off on the change. But realistically, that’s rare; most agents will simply stick to the agreed number. 

And a quick reassuring note: Hawaiʻi REALTORS® have tools to smoothly handle these commission mismatches. Use our forms, and you shouldn’t have any problem gracefully resolving commission excesses or shortfalls. 

“Can I See Your Agreement?” – When the Listing Side Asks for the BRC

Our story continues: Malia’s offer (with the commission arrangement sorted) is now in escrow. The finish line is in sight. But an interesting request comes in from the listing agent representing the seller. She emails Kai: “Please provide a copy of your Buyer Representation Contract for our files.” Kai expected this might happen. Ever since the new rules took effect, some listing agents and sellers have been asking to see the BRC that buyers’ agents have with their clients. It’s a question that puts brokers in a bit of an uncomfortable spot. On one hand, there’s nothing scandalous in the contract – it’s mostly boilerplate plus the agreed fee. On the other hand, it’s a private agreement between Kai and Malia, and it contains details that the seller side really has no business poking into (like how long Kai is engaged as her agent, or other services promised). 

So, does Kai have to show the BRC to the other side? The general answer is no, he doesn’t. The buyer-broker agreement is confidential – part of an agent’s fiduciary duty is to keep their client’s information private, and that contract is essentially an extension of the client-agent relationship. There’s no law or rule requiring a buyer’s agent to hand it over to a seller or their agent. In fact, revealing it could inadvertently expose things about your relationship with the buyer that could disadvantage your buyer in negotiations with the seller. 

But Kai also knows why the seller’s agent is asking. The new landscape has made listing agents a bit jumpy about two things: compliance and commission. They want to make sure:

·       that Kai actually had a BRC signed before he showed the property (to ensure no one in the transaction ran afoul of those settlement rules), and

·       that Kai isn’t in a position to pull any moves with the commission money. 

Essentially, the listing side is trying to cover their bases: if this deal closes and later someone accuses the listing broker or seller of not following the new rules, they want proof that everything was done correctly. 

The listing broker might worry, for instance, “What if Malia promised Kai a lower commission that we’re offering him. Is he planning on pocketing the extra commission? If he does, can we get in trouble with the MLS?” And the seller might question, “If Kai is accepting more commission that his contract allows, can I get the difference back?”. 

These kinds of thoughts are buzzing around, prompting listing brokers and sellers to request copies of buyer broker contracts. 

Kai considers his response. He knows that if he says, “Sorry, I can’t show it to you,” it might raise suspicion or irritate the other side. So he crafts a diplomatic answer. He replies: 

I do have a signed buyer representation agreement with Malia, as required. It was executed before any property tours, in full compliance with the rules, however, that agreement is confidential between me and my client. Rest assured, we’re adhering to all terms – I won’t accept any compensation above what we agreed to, and any necessary commission adjustments have been handled in our offer. 

In other words, he reassures them that their concerns are addressed, without actually handing over the contract. Once Kai explains this, most reasonable listing agents drop the issue. After all, pressing further could border on invading the buyer’s privacy and could sour the cooperative spirit of the transaction. 

Off-MLS Commission Offers

Meanwhile, on the listing side of things, there’s another quiet revolution underfoot. Remember how Kai had to learn about the offered 2% commission on that Kaimuki cottage through an email? That’s because the MLS can no longer be used to broadcast compensation offers. This change has arguably had the biggest immediate impact on daily workflows. Every agent and broker in Hawaiʻi was accustomed to checking the MLS for not just the property details, but also the line that said how much the seller was offering to pay a buyer’s agent. It was as routine as checking the number of bedrooms. But since last August, that line is gone. What that means in practice is that co-op commissions have gone semi-underground – communicated through backchannels and direct outreach. 

Let’s switch perspectives for a moment. Imagine you’re a listing agent. You’ve signed a listing agreement with your seller, and together you decided that offering, say, 2.5% to any buyer’s broker is a smart move to attract interest. How do you let the world of buyer agents know? You can’t just put it on the MLS listing page anymore. So you get creative off the MLS:

·       You might send out email blasts or flyers to brokerage offices: “New listing on Aloha Street – 3 bed/2 bath, X% to buyer’s agents!” 

·       You might update your brokerage’s internal website or portal with the co-op info, or use a private Facebook or WhatsApp group of local REALTORS® to spread the word. 

·       Perhaps you even add a rider on your “For Sale” yard sign.

All of these approaches are fair game. In fact, they’ve quickly become standard. A few old-timers half-joke that it feels like the pre-internet days, making phone calls and faxing flyers to share listing info. The truth is, we’re still sharing the info, just not in one centralized, one-click way. It requires a bit more proactive communication. If you’re a buyer’s agent and you haven’t heard or seen an announcement about a given listing’s commission, you’re now encouraged (really, forced) to call the listing agent and ask, “What’s the co-op on this?” It’s a quick question, but it was one we rarely needed to ask before. Now we do, and that’s fine – it opens up a conversation, and it’s completely normal under the new rules. 

One cautionary note: just because commission offers are off the MLS doesn’t mean listings themselves can stay off MLS. The Clear Cooperation Policy  is still in effect. That policy, in plain terms, says if you publicly market a property, you must put it into the MLS for other brokers to see within one business day. 

Let’s illustrate with a quick anecdote: Leilani, another REALTOR® friend of Kai’s, gets a hot new listing – a condo in Kakaʻako with stunning views. The seller, Mr. Tanaka, agrees to offer 2% to the buyer’s broker. Leilani posts on a private Instagram group for local agents a teaser about the condo: gorgeous photos, price, and “2% broker co-op” in the caption. That same day, she inputs the listing into the MLS, but there’s nothing about 2% on that MLS entry. By doing this, she’s following the new protocol perfectly: she publicly marketed, so she listed it on MLS right away (CCP satisfied), and she shared the commission off-MLS through a private channel (compensation rule satisfied). Within hours, buyer’s agents are calling her to schedule showings and verify that 2% (if they didn’t see the Instagram, they’re asking directly). It’s a bit more legwork, but the information flows. 

From the buyer’s agent side, Kai has learned to always double-check on commission early in the process of any deal. It’s become as routine as confirming the property is still available. If a client of his likes a house, he’ll shoot a quick text or call: “Hey, I saw your listing on Aloha Street. Can you confirm what, if any, co-op you’re offering to buyers’ brokers?” Listing agents expect this question now; it’s not seen as gauche or aggressive – it’s just due diligence. And because the seller’s consent is needed for any commission offer, listing agents are careful to have that conversation with their sellers during the listing agreement signing. In fact, HAR even retired the old standalone “Cooperating Broker Compensation” form (remember that form, RR214?– it doesn’t exist anymore). 

The listing contract itself covers the seller’s decision on cooperation and compensation offered. So when Leilani took Mr. Tanaka’s listing, part of their paperwork explicitly said “Offer X% to a cooperating broker.” That means when an inquiry comes from a buyer’s agent, Leilani isn’t pulling a number out of thin air or deciding on the fly; it’s part of the listing terms with the seller. This is important: sellers are in the driver’s seat now more than ever on what commission, if any, to offer. 

A seller could choose to offer nothing – and some have tried that, aiming to see if buyer’s agents will still show the property (most will, but they’ll definitely ensure their buyer has a BRC agreeing the buyer will pay them, or they negotiate it into the deal). The point is, transparency and seller permission are baked in from the start. No secret side deals. Every dollar promised to a buyer’s broker from the seller’s side is a dollar the seller agreed to pay.

Coffee Talk – FAQs and War Stories Six Months Later

By now, Kai’s and Malia’s deals has closed successfully. Malia is happily painting her new living room a lovely coral blue, and Kai has banked his hard-earned commission (with no loose ends). Kai, feeling both relief and pride, heads to his favorite coffee shop in Kaimuki, Coffee Talk, to catch up with a few colleagues – fellow agents and brokers who, like him, have been navigating these new waters of broker compensation. Over coffee and malasadas, they swap stories from the past half-year. It’s a lighthearted but insightful chat, the kind where you realize you’re not alone in facing certain challenges. Let’s listen in on a few snippets, because their frequently asked questions echo what many in the industry (and curious clients) have been asking. 

Agent One

 Agent One: “So guys, be honest – do you really get a BRC for every buyer now? What about those one-off situations? I had a cousin in town who just wanted to see one condo in Waikiki for fun. Did I seriously need to whip out a contract?”

Several agents nod knowingly. Kai chimes in with a smile, “If you were opening the door for him as his agent, then yes, yeah – even for your cousin. The rule doesn’t care if it’s one day or one year. I actually had a situation like that with a family friend. It was awkward for five minutes while I explained the form, but we got it done. If they’re really just ‘looking’ and refuse to sign, then I stay in listing agent mode and don’t become their representative.” He shrugs. “It’s not worth risking a violation. Plus, if things turn serious later, you’ll wish you had that agreement. No exceptions for ‘ohana’ or quick favors, unfortunately.” They all laugh, imagining making your auntie sign a contract is sort of funny – but they also all understand the seriousness. 

Agent Two

Agent Two: “What if a buyer flat-out refuses to sign the BRC? I had this internet lead who said, ‘I’m not signing any exclusivity or anything upfront. Other agents don’t make me do that.’ – which, by the way, I suspect was a lie.” 

Now there’s a collective groan. Everyone’s encountered at least one stubborn client. Leilani, our Kakaʻako condo lister, shares her approach: “I actually turned one away last month. This couple kept dodging the paperwork, and I finally said, ‘Look, I’m sorry, but I can’t show you more homes without a basic agreement. It’s required, and it’s also for your benefit so you know I’m committed to you.’ They walked away and probably found someone else… but I’m okay with that. Better than breaking the rules or spending weeks driving them around only for them to maybe ditch me later.” Kai adds, “I tell ’em it’s like hiring me officially. No one likes extra paperwork, but once I explain it’s an industry standard now – most folks come around. The few who don’t? Red flag clients, honestly. If they can’t commit to you, you probably dodged a bullet.” Heads around the table bob in agreement. It’s a tough mindset shift – saying no to potential business – but the consensus is that following the rule is non-negotiable. An agent quips, “Honor system is over. I’m not losing my license or MLS access for someone who won’t sign one piece of paper.” 

Agent Three

Agent 3: “Have any of you dealt with referral fees or bonuses since all this? 

This question turns a few heads because it’s nuanced. Another broker at the table, Melissa, responds, “The BRC says compensation from any source is subject to that agreed total.  

The group murmurs. 

Kai offers his two cents: “I had a developer offer a $5,000 bonus if we closed by year-end. First thing I did was tell my buyer, ‘Hey, just so you know, there’s a bonus on the table for me. My agreement with you is 2%, and I’m going to stick to that – anything above will go toward your closing costs, or I’ll adjust my commission.’ The buyer was actually impressed. It built more trust, and we wrote an addendum that any bonus would effectively reduce the purchase price or benefit the buyer. I still ended up with what I bargained for, and my client felt like I had their back 100%.” 

That story gets appreciative nods. 

The takeaway: treat bonuses or referral fees like any other piece of the compensation puzzle – be transparent and make sure you’re not violating the agreed cap. No agent wants a call from a lawyer later asking why they pocketed an extra check without telling their client. 

Agent 4: 

Agent Four: “Okay, last big one – how on earth are these rules going to be enforced? Is the MLS police going to show up if I forget to get a BRC signed?” (He raises his hands in mock surrender, and everyone chuckles.) 

Leilani, who keeps up with MLS memos, answers: “Enforcement is definitely in play. Our local MLSs have adopted these rules, and they can fine agents or brokers who don’t comply. They’re not checking every single showing, but if someone reports you – say another agent notices you keep popping into open houses with buyers and suspects you didn’t do the paperwork – they can investigate. I heard one story of an agent who had to show proof of a signed contract after a complaint. Luckily she had it. If she didn’t? Could’ve been a fine or even a suspension from the MLS.” Kai adds, “Also, our brokers-in-charge are watching us like hawks on this now. My brokerage has a policy: no BRC, no commission payout – they won’t even process a deal if the file’s missing a buyer agreement. It keeps everyone in line internally.” 

Melissa chimes in with a broader view: “Plus, consider the legal side. These rules came from a settlement – meaning there’s a court keeping an eye on industry compliance. If we all ignored it, we’d be back in court or facing worse regulations. And if an individual agent blatantly disregards the rules and a client feels harmed, you bet that could turn into a lawsuit or a license complaint. So yeah, it’s not just the honor system. There are teeth behind these requirements.” 

The coffee chat winds down on a positive note. One newer agent says, “Honestly, I was nervous at first, but now it’s not so bad. Clients don’t seem to mind once I explain, and I feel more protected too.” Another laughs, “Yeah, we’re all getting used to it. It’s just the new way of doing business.” They clink their coffee cups in a mock toast to surviving six months of change and head out to their next appointments.

Outro 

Mahalo for joining us for this month’s focus piece on the Hawaiʻi Real Estate podcast. We hope that today’s exploration gave you some valuable perspective and insights into the issues shaping our local real estate landscape here in Hawaiʻi. 

Make sure to tune in again on May 10th for our Real Data Report, where we’ll analyze the latest housing market data to help you stay informed and prepared in Hawaiʻi’s dynamic housing market. 

Until then, please remember to “like” and “subscribe.” 

Thank you for listening, and until next time – a hui hou!