MLS Increases TNAS Fine From $100 to $1,000

Trying to Keep the Playing Field Level

“As you are no doubt aware, allowing a showing on your listing while it is in TNAS (Temporarily Not Available for Showing) status is a NorthstarMLS rule violation. We have changed the fine for this violation to the List Agent from $100 to $1,000. This reflects its more serious nature and brings it in line with the $1,000 fine amount that is already in place for showing a listing while it is in Coming Soon status.”

–Northstar MLS (May 3, 2019).

[Editor’s Note: The views expressed here are solely those of Ross Kaplan, and do not represent Edina Realty, Berkshire Hathaway (“Berkshire”), or any other entity referenced. Edina Realty is a subsidiary of Berkshire.]

While I applaud the MLS’ decision to increase the fine for showing TNAS listings, I doubt that — even at $1,000 — the fine is a sufficient deterrent.

That’s because the payout commission (offered to the Buyer’s agent) on even an average-priced Twin Cities home is significantly more.

Wanna guess who’s improperly showing the TNAS home?

My gut tells me that the majority of the time, the Buyer’s agent doing the showing is also the listing agent — a practice known as “dual agency.”

Buyer’s Agent Commission Math

Assuming a $250,000 home offering a 2.7% payout, the Buyer’s agent stands to pocket $6,750 on a consummated sale (note, though, that that’s before their broker takes a cut — in some cases, as much as 50%).

Which leaves two other calculations for listing agents tempted to look the other way on allowing TNAS properties to be shown: 1) what are the odds that the showing will result in a sale?; and 2) what are the odds of being caught?

My answers: 1) usually only 10% — but potentially much higher depending on the home and specific Buyer; and 2) virtually nil.

All of which argues that, when it comes to keeping TNAS and “Coming Soon” properties from being shown, if MLS truly wants to assure a level playing field for all Buyers, a better strategy than deterrence is simply banning dual agency.

See also, “Perils of Dual Agency, Exhibit A“; ““Dual Agent” vs. “Double Agent”“; and “Bell Curves, Home Showings, and the Odds of Getting an Offer: Why Home Sellers Shouldn’t Get Too Excited About a 1st Showing.”



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