Multiple Listing Services (MLS) is to the real estate industry like peanut butter and jelly is to bread. You can’t have one without the other.

MLS has approximately 750 organizations throughout the country. Set up in the late 1800’s, brokers began creating information gathering and sharing access about available properties that agents could then use to buy and sell those properties. Each local MLS could then and now control its own property database by charging membership fees to agents and brokers. Each MLS had and continue to have its own criteria for membership and each had and has its own fee structure. Additionally, each MLS could control its own rules and its own standards.

All well and good for local autonomy and control but so not well and good for standard information and access. In 2016, the Real Estate Standards Organization (RESO), initially under the umbrella of the National Association of Realtors but now incorporated as an independent, non-profit in 2011 to “…develop, adopt and implement open and accepted data standards and processes across all real estate transactions…” found common problems with MLSs. Those problems included

*inconsistent data fields between different MLSs
* inconsistent licensing issues of agents across markets
*inconsistent membership fee structures.

These problems manifest in different ways. For example, Redfin, an internet-centric brokerage, could access MLS property information but other internet-centric brokerages such as ListHub, Zillow, Open Listings, Real Bird, etc. might not be granted data to real estate data controlled by a local MLS. Brokerages and agents must have licensed brokerages in every state in order to access property data in every state. Brokerages and agents must apply for and maintain membership in every MLS within states plus must have the capacity to integrate various databases into their systems in order to use that property data. And, every MLS requires upfront membership fees to the tune of $20,000 and annual membership fees of approximately $10,000.

With some 750 MLSs around the country, the total cost nationally could be $15M in startup costs and $7.5M in recurring costs.

With all these problems and more, one non-profit, non-partisan think tank and watchdog, the Information Technology and Innovation Foundation (ITIF), is calling for an investigation of Multiple Listing Services for possible antitrust violations. Questions the ITIF would like answered include

1. Can MLSs prevent usage of property data to some agents/brokers and not others?
2. Can MLSs keep data fragmented and nonstandardized?
3. Can MLSs undercut online services that allow consumers to be less reliant on brokers for buying/selling homes?
4. Can MLSs block listings from third party websites?
5. Can MLSs NOT provide brokers/agents with one single portal to input real estate information that then feeds into other various real estate information systems?

The ITIF’s conclusion? “Given that real estate brokers/agents without thousands of listings from third party sites or make access to their listing information dependent on premium placement for their agents, regulators and policymakers should take a new look at how this can increase competition in the real estate sector so as to benefit consumers.”

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