that that's probably not the. Go ahead with the next question. That's probably the best

portion I can read. Janine, she's greeting someone. So this is going to

introduce the talk. or are we just talking about it generally?

Generally. Where do we take first look with what answers? Right. If you join an MLS, you are agreeing to their rules, and if their rules say that we are all entering into this agreement together, and it's a mutually beneficial relationship, or we are sharing our listings with each other, then you should uphold those rules, right? You're not taking a free ride from us getting all of our listings. Well, we don't enjoy that same benefit from you.

They should also ask the question.

Why would I don't get the socialism part about the question? I'm not sure where that's going. I'm just reading them. But there's also we also think about we also have to think about the state law, right, which requires that you cannot market a home to a certain group of brokers or potential buyers. You have to concurrently market it to the general public and to all other licensees. And is having that listing on one or two websites is that sufficient? That's for a judge to decide, not for any of us sitting up here to make that determination. One of the best ways to make sure you are accomplishing that is listing it in an MLS and making sure that IDS fee is going out to all other websites that consumers are accessing.

Yeah, and if you have if you fit under the exemption that's supplied by the statute, then you have that in your pocket, and perhaps will be called upon to support the validity of your assertion of that exemption. Perhaps you won't, but that's that's your that's your option for engaging in marketing other than what Aaron has spread.

Yeah, and if you don't want to abide by that house, please don't be a member, right? I think that's number one.

So if we're talking about first look, the other component of it, I think that Aaron hit what is a really tender spot within the question of the public marketing law, what what is enough when the when state law says that you must it what it says is if you if you if you market where does market if you market to an exclusive group of buyers or brokers then you must simultaneously market not expose the listing on a public-facing website, but you must simultaneously market to the general public and the brokers what is enough to discharge that statutory duty, and and the easy answer is an IDX fee is enough to discharge that statutory duty. Anything less than an IDXV raises the question: Was it enough? And makes you a potential name on the other side of the verses in the lawsuit that may or may not eventually be filed over this issue. The other component, though, of the first look question, the first look status is if the first look status is used. One of the most significant features of the first look status is that while the listing is in first look, the days on market and any price adjustments are not publicly displayed, which then raises the question: So what? Which takes us back to the agency law, and a broker's every single broker has the unwavable, unavoidable duty to all parties in the transaction, regardless of who you represent, to disclose material facts, which includes information that is not readily apparent or readily ascertainable to the consumer, and the definition of material fact includes, in part, information that is substantially information that substantially adversely affects the value of the property, and so as we're kind of unpacking this duty, the first question we have to ask is: Are the is an accurate representation of the days on market and price changes? Is that information significant to a buyer when they're considering purchasing property? And they all

said,

"Yeah. Every time I've taught this in a class, there's uniformity in opinion. Yes, that is important to the buyer. So if you then then the question is substantially adverse information affecting the value of the property, and for brokers who want to say no, I don't think it rises to that level, then my response would be then just disclose it, and then when you say just disclose at the end, response is well no we don't want to disclose it. Well, why don't you want to disclose it? Because it might impact the buyer's decision to purchase. So then that brings us it becomes this circular conversation, right? So accepting for a moment that it is material information, if it's not publicly displayed for the time period that the listing was in first look, which it's not, and it never will be, then is it readily ascertainable to the consumer? And the answer is no, it's not. Which then brings us to the question: Then does that mean that rovers now have an unavoidable, unbelievable duty to disclose to buyers the accurate days on market and any price changes that occurred to include the time that the property was in first look, because the publicly displayed information will now be days active. The acronym DA or CDA for cumulative days active, without giving information to the buyer that that does not include any days in first look. If there were days in first look for this listing, which then of course leads to the conclusion of so what are you telling us we should or shouldn't do? The education I've been giving in classes is if you read the Northwest MLS FAQ, the very first sentence is it's a new optional listing status to be used when the property is not yet ready for active. When is a property not ready for active? When is a property that goes in the MLS not ready for active status? I would suggest that from the years of listing broker experience represented in this room, all of you have succeeded as listing brokers without having the access to anything other than an active status until about a week ago. So when you tell me that all of a sudden property may not be ready for active status, okay, that's your decision to make. You you can reach that conclusion, but recognizing that then you now have taken on a duty to disclose material facts that you otherwise don't have. So if you don't want this additional burden of of disclosing the material facts, time on market, and price changes during first look, and the risk that Eric called out, which is you may may not be meeting the requirement of the public marketing law, then the way you avoid those two risk factors is you use first look only if your property really truly is not yet yet ready for active status, and and it's hard for me to figure out what property really isn't ready for active status. I've tried and tried and tried to come up with examples, and I've had lots of people give me examples. And the one example that brokers really want to cling to is this. I have a seller who's insistent on getting the market property on the market right away, but their house needs new carpet. It needs new paint. It needs a yard rehab, and they're working now on all of that. It'll be ready in two weeks, maybe three weeks. That's really when it's going to be ready. But they really want to get it on the market now. Okay, that's great. If they're insistent on getting in the market now, it's ready for active. Put as many pictures out there as you want, and put in the listing no showings, no showings until whenever. You've always been able to say no showings on an active listing, and if that's the goal, you accomplish that goal without without taking on the additional risk that Aaron identified, and the additional risk of having to make more disclosures of material fact,

that was good, and I agree with almost everything. I would have a slight different take on reaching a firm conclusion that is a material fact, just because I don't know that you can say. Certainly, an expert could make the case that it does substantially versus affect the value of property, days on market, price changes, that kind of thing. I don't know that I'll go there and say automatically yes, that's the case every time. But I appreciate the point. I don't think the point is wrong at all. That there is certainly risk there. I would come at it from a little bit of a different angle. There's two things in my mind to be concerned about in the first look. One you hit on, which is RCW 186-130, also known as SB 6091. No one can say with certainty what satisfies that law. It's very brief. It will be up to a King County, Pierce County, Snohomish County judge under individual circumstances, to determine whether anything less than full IDS publication of a listing satisfies that statute, so we have uncertainty with that law. It's just baked in any lawyer that tells you, "I know precisely how this is going to go for anything other than IDS, I think is getting out of rigorous keys. Now, I will say, I can see an argument that even just putting a sign in the front yard, there's an argument, right? Is that publicly marketing a property to all brokers and all buyers so accepting?

Much less accepting an offer during the 21 days.

Yeah, yeah. The point is that reasonable minds can differ on that. The reasonable minds can differ. That's an area for lawyers to make hay, right? The second piece of the first look that I think you need to pay attention to, and those that that come to the panel and have seen me here have probably heard this, so you can tune out. But I defend brokers. That is what I do. I go in front of real live judges, and I repeatedly see, and I've seen it for approaching 30 years. They don't understand your industry. They don't know real estate. They have a very difficult job. You know, in one in one month, they're handling a murder trial, and then six months later, they enter in a complex business trial. No human being can be an expert in all the areas they have to, and they have a divorce, right, or a custom theft, or something like that. So they're not nearly as informed about the world as you would like them to be. And I repeatedly see instances where my real estate broker clients are very surprised at arguments that are made by plaintiffs' lawyers that seem preposterous, and they get the attention of a superior court judge. And then, along with that, what has changed since I have been a lawyer is when I first started the Consumer Protection Act, which was RCW in 1986, was still evolving. Actually, it kind of started, you know, with Hangman made back in the late 80s, but it was still evolving into the early 2000s. What has happened with that statute is we used to see 1886-based claims, and that was it. And now, every single time it seems that someone is going to pursue a broker, they will assert a Consumer Protection Act (CPA) claim every time, because the way that law has evolved is it prohibits unfair, deceptive business practices. Well, what is unfair deceptive? That very much is a suggested exercise, and that is what we call congressional law. So it's up to the judge to decide what is unfair or deceptive, and it provides, you know, basically a free fall for plaintiffs to say, "Well, that's unfair. That's deceptive. When it comes to broker advertising, you are prone to those arguments, so anything about your advertising of a property that could be deemed to be deceptive, could be deemed to be can violate that statute. And I go one step through: the way the law has evolved, the advertising does not need to be false. It doesn't need to be untrue. It can be 100% accurate, and the consumer can even know the act; they can even understand the facts. In other words, they know the truth of the matter, but yet you still can have a violation of that statute, which is why disclosure, in of itself, of material facts doesn't insulate you from a CPA claim, you can still be sued for a CPA claim even though a buyer was told days on market was told about price changes. If some judge deems the absence of that information listing, or maybe having word things to be unfair and deceptive, so I would exercise a lot of caution in how you use first look. I agree with Annie's statement that if you're going into first look and you really are ready for the market, you know, for all intents and purposes, there's really not much that's going to change between the day you go on first look and then the day you go active on a listing. You should ask yourself, why are we doing this? You know, what is the difference? Why we need to go first look and not go active? And if you just, you know, if you're doing those kinds of first look listings where there's no appreciable difference, there's no reason. I leave room that I think there are. I've heard some explanations where it makes sense to me that first look would be a good tool to use. So I've heard things like unique properties you have trouble valuing because there aren't comps, and so you want feedback. And RCWA 106130 restricts your ability to do that. I heard a good one the other day that maybe you have a contingent setting on 22B, and you've got to get the buyer's property on the market right away.

It's not quite ready yet, and maybe you want to go into first look status. Seems to me, if that's true, you would have no showings while you're getting the house ready and then ultimately go active. But you could satisfy the requirement over to 22B. I've heard pre-marketing that you couldn't do, but again, if maybe you're trying to, and I use this term sheepishly because I'm not a marketer, but built the story is what I was told for a property, and the marketing again, it seemed to me if you're doing things like painting and bringing in furniture and updating the landscaping, and you want to promote all that social media. Then again, and you're truly building a story. Well, then you're not an active listing. You shouldn't be allowed showings. So those are just a few. I'm sure there are others. So I leave some room for that where there are instances. But to me, that's what you're thinking about: is should I really be in first look status. Do I have a you know a reason why I'm not in active status? And if you can't answer that question in a way that would persuade a King County judge that there was a viable reason for this, other than to deceive a consumer or to have an unfair advantage over a consumer, you know, then there's there's risk, and I would finish with this. I'm I'm a pretty risk tolerant person in general when it comes to these kinds of things. I don't. It's super easy to tell brokers don't ever do this, don't ever do that, you'll never get sued. That's just not good advice, right? We have to find ways to, you know, temper the risk, mitigate the risk, and understanding. There's always some risk. You're in an you know an era in your industry where people are looking at you. There's no denying, and plaintiffs' lawyers are aware that some of these lawsuit lawsuits have popped for a lot of money. So it shouldn't come as a surprise that this also is going to be scrutinized. We don't know when, we don't know by who, but it will happen. And whether or not someone thinks it's a good idea to file a class action lawsuit against a firm and argue that every first look listing they had for the last four years makes for a good class action lawsuit, none of us can tell you, but there's no doubt that this will be just like compensation. Everything else, it'll be looked at by the plaintiffs' bar, and then we'll see whether or not they think there's anything there. They want to file a class action lawsuit.

Couldn't agree more. I mean, I was going to say exactly what Lars just finished up on, which is that I mean, all of the class action lawsuits that this industry has been facing over the last like what six seven years, they're all all those cases are about arguments that brokers and firms have been hiding the ball from consumers, and so if you want to if you want to engage in the risk analysis that bar is very elegantly laid out, I mean it is exactly that. It's a it's a cost benefit risk analysis. I mean, and even if you're not talking about a being a defendant in a class action lawsuit, you're you're potentially going to be a defendant in a CPA lawsuit where you know you can be tagged for treble damages and attorneys, so we have some questions from the from that.

I'm sorry, I just want to clarify really fast. All of us have said this, but in your examples, I'm afraid that it might have gotten swished up a little bit. First look is not a safe harbor from a public marketing law, RCW 1886.130. Just because you put it in first look, do not think that means that that shields you then from the public marketing law. It doesn't. It simply shifts the burden from Northwest MLS, which would automatically elevate your listing to an IDXV. It puts the burden of compliance with the public marketing law on you directly. So please don't take the assumption from what Lars said about you might need some time on the market before you go active, or you might you might need to have some get some price feedback or something like that. You are still subject to the public parking law even during that time.

Sorry. Questions? No, it's time to move on. Oh, it's time to move on with other questions. Okay, I didn't realize we were going to be talking about this when I wrote these scenarios.