Share(Last updated Feb. 2017)
1. Why is NAR providing this Sample AVM Data License Agreement?
At the May 2014 Board of Directors Meeting, the Board approved an amendment to NAR’s MLS Policy Handbook clarifying that MLSs are required to supply Participants with the information necessary to create fully-automated Automated Valuation Models (AVMs). In cases where Participants use third-party vendors to create AVMs, vendors’ access to the requisite datafeeds may be conditioned on execution of a third-party data license agreement.
The Sample AVM Data License Agreement and accompanying Checklist of Issues (available here) are intended as a resource that MLSs, Participants, and Vendors may consult when drafting an AVM data license agreement tailored to their particular needs.
2. Does this mean Participants must provide AVMs to clients?
No, Participants are not required to provide AVMs. The policy change clarifies that AVMs are included among the valuations Participants may provide, and that MLSs must make information available to Participants in a manner that facilitates development of fully-automated AVMs possible.
3. Must Participants use a third-party vendor to create AVMs?
No, Participants are not required to use third-party vendors to create AVMs.
4. Should MLSs, Participants and Vendors use an AVM data license agreement?
Yes, the parties should draft a license agreement that addresses their specific legal needs. The sample agreement (available here) does not constitute legal advice, and NAR encourages all parties to consult with legal counsel prior to entering into any license agreement. The Sample AVM Data License Agreement is for reference only.
5. Are MLSs located in non-disclosure states permitted to withhold “sold data” from MLS data feeds for use in generating AVMs?
No, MLSs located in non-disclosure states cannot withhold sold data from MLS data feeds as the restrictions on use of sold data relates only to public display of that information. Participants can use sold data, in the same fashion that other data provided by the MLS is used, to develop estimates of value.
6. May an MLS exclude confidential information from the vendor data feed?
Yes, an MLS may only exclude confidential information from the vendor data feed, for example, showing information or cooperative compensation amounts. The MLS may not exclude any information necessary for creation of AVMs.
7. Are MLSs required to provide MLS participants with an MLS data feed that includes all of the “non-confidential” data fields?
Yes. Any MLS content in data feeds available to participants for real estate brokerage purposes must also be available to participants for valuation purposes, including AVMs.
8. If all of the data fields necessary to create an AVM are currently available from the MLS via one data feed, may an MLS provide an MLS participant all such fields via a combination of two or more data feeds?
No. If all of the data fields necessary to create an AVM are currently available from the MLS via one data feed, then the MLS must provide that single data feed to the MLS participant for this purpose.
9. May Participants or vendors distribute AVMs through third-party “clearinghouse” websites?
Yes, Participants or vendors may use third-party “clearinghouses” to receive and fulfill orders for AVM reports. AVM reports are not publicly displayed on a clearinghouse website but are instead delivered to customers through the website.
10. Must a Participant or vendor share revenue stemming from delivery of AVMs with the MLS?
No. The MLS Policy states that fees related to AVM datafeeds are limited to “reasonably estimated costs incurred by the MLS in adding or enhancing its downloading capacity [to enable the feed to be used for valuation purposes].”
11. May MLSs charge participants license fees for MLS data feeds that exceeds the MLSs cost in providing such feeds?
No. MLSs may only require participants who will use such data feeds to pay the reasonably estimated costs incurred by the MLS in adding or enhancing its downloading capacity for this purpose.
12. What is the proper scope of a compliance audit (as described in Section IV.F of the Sample AVM Data License Agreement)?
The compliance audit should be reasonably tailored to confirm compliance with the AVM license agreement. The parties have the option of including specific limitations on the compliance audit, such as the number of AVMs an MLS may order and the specific books/records the MLS may inspect.
13. May an MLS restrict use of MLS data feeds for AVM generation only to the broker of the office participating in the MLS, and prohibit MLS subscribers affiliated with the participant from using the MLS data feed for AVM generation, even if the participant authorizes such use by his or her affiliated subscribers?
No. NAR’s MLS Policy Statement 7.79 provides that “[N]one of the foregoing shall be construed to prevent any individual legitimately in possession of current listing information, sold information, comparables, or statistical information from utilizing such information to support valuations on particular properties for clients and customers.” The reference to “any individual” includes subscribers affiliated with a participant who are “legitimately in possession” of the MLS data. The MLS may, however, require the subscriber and the participant to execute any license agreement that the MLS requires for receipt of a data feed for the purpose of generating valuations.