NAR policies ‘didn’t contemplate’ AI — so now what? – RealEstateNews.com
Zillow’s ChatGPT integration has sparked conversations about innovation, transparency and how the industry should navigate an increasingly AI-driven world.
Editor's note: This is the second part of a two-part series exploring the newly released ChatGPT app from Zillow, and the questions it has raised within an industry operating under listing display rules that were written at the turn of the century. Read part one here.
Zillow's recent launch of an app within ChatGPT has created more controversy than one might expect. After all, as more people use the chatbot like a search engine, accessing apps through the platform seems like a logical evolution.
But tech — and artificial intelligence in particular — is advancing faster than the industry can keep up with it. Some existing rules and policies may no longer make sense in the current technological environment, leaving them open to new and potentially conflicting interpretations.
NAR's IDX rules date back to the year 2000. They have been tweaked over the years, but now, with Zillow bringing listings to ChatGPT, those rules are due for an update, several industry leaders told Real Estate News.
Current IDX rules center on what you're not supposed to do with MLS data as opposed to how brokers can innovate, not only in the display of the data, but in facilitating new applications and new information, according to Russ Cofano, co-founder and principal of Alloy Advisors and a licensed attorney.
"We need to go back and look at those rules and say, 'Do these serve the industry in today's world, or do they hold the industry back?'" he said.
Mitch Skinner, attorney and managing member of the Larson Skinner law firm, told Real Estate News his firm is investigating whether the Zillow-ChatGPT integration is IDX-compliant for their MLS clients — but it's not an easy task.
"IDX policy didn't contemplate this," Skinner said. "So it's difficult to analyze whether or not [the integration] fits, because, by definition, it kind of doesn't."
Another complication? It's up to the nation's 500+ MLSs, all with their own rules and enforcement procedures, to ensure compliance — something NAR underscored in an Oct. 21 statement. "Each MLS is individually responsible for conducting its own assessment of technologies that use and display MLS data," NAR wrote with regard to the Zillow integration.
For MLSs that have written IDX rules "to accommodate evolving technologies outside of basic websites, mobile apps and audio," the integration may be compliant, Skinner said — but all MLSs should be thinking critically about the bigger picture, he advised.
Rather than just updating existing rules, MLSs should consider creating new, AI-focused policies, Skinner suggested.
"The technology is really impressive, and MLSs don't want to be Luddites and want to enable new technologies to be used," he said.
The Council of Multiple Listing Services (CMLS), a trade organization that counts 235 MLSs as members, agrees that "IDX policy was written in a different era" — and it should evolve with technology, "not behind it."
"[I]t is appropriate that MLSs are asking how existing rules apply," the trade group said in a statement, adding that such questions merit "a robust discussion."
"Whether this integration is ultimately deemed compliant or not, the industry must move toward policy that is technology agnostic, and that safeguards data while growing alongside innovation and how consumers actually search for homes," CMLS said.
That balance between stewardship and innovation represents an opportunity for MLSs to lead, according to the trade group.
Zillow went through "a painstaking process" to make sure it was following MLS rules, Errol Samuelson, the company's chief industry development officer, noted during a recent Real Estate Insiders Unfiltered podcast.
First, he said Zillow met with a group of about five MLS attorneys who represent some 30 to 50 MLSs nationwide and walked them through the app, asking if they saw any problems with compliance.
"They gave us some great feedback," Samuelson said. "At the end of the session, they said, 'This looks really good.'"
From there, "we worked with our legal team to get their input because they worked on all of these IDX agreements," he explained. "We actually have a couple of people in the company who used to run MLSs, so we spoke with them as well to make sure we got this right."
But this is not how the industry decides policy, according to Victor Lund, founding partner and co-CEO of real estate consulting firm WAV Group.
"Every year, there is a process where brokers, agents, lawyers, MLS executives, and technologists bring ideas for change" to NAR's Multiple Listing Issues and Policies Committee, where they "undergo healthy debate," he said.
"This deliberative approach has served the industry well, ensuring that changes are considered carefully and collectively," Lund added. He agrees with others who say MLSs should come up with new, AI-specific rules around listing data — but he thinks it should be done through NAR's MLS policy committee.
However, Samuelson stressed that the current NAR process to change MLS rules is "very complicated."
"The rules should be standardized and I think that the process should be streamlined. Now, not so streamlined that rules can be changed every six months and vendors are whipsawed either, but I think there is room for innovation here," Samuelson said.
NAR's appetite for policy debate seems to have waned in recent years as the trade group has faced multiple antitrust lawsuits and regulatory scrutiny related to its MLS rules.
According to Skinner, MLSs are looking to NAR to advise them, but the association appears to be giving local MLSs more discretion around policy implementation.
"I think [it] is a good approach, but it just means that MLSs now need to exercise more discretion themselves" as they weigh the legal risks, Skinner said.
Danny Frank, an agent at JLA Realty and a former chair of the Houston Association of Realtors, filed a complaint with HAR over the Zillow-ChatGPT integration — but in addition to voicing his concerns, he asked HAR to "Collaborate with other Texas MLSs to define clear, enforceable AI-era data governance standards" and clarify "how MLS data may (and may not) be used with AI systems."
He could see NAR providing guidelines for such standards, but he would prefer that local MLSs take the lead "to protect what their people want," he said.
NAR declined to comment for this story.
Miss part one? Find it here.
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