Brief Report from NAR Midyear MLS Policy Committee Meetings


Let’s just say that Internet access where I am is shaky, at best. So I’ll try to keep this as brief as possible.

A couple of interesting things happened today at the MLS Policy Committee Meeting. I’m sure the full report will be available after Midyear, but these are my initial brief thoughts.

MLS Public Websites: Basic Service

While the Committee considered a number of different things — with anti-trust issues of lockboxes and other services being the most important — almost all of the energy was around the issue of MLS public facing websites.

Boiled down to the essential question, the issue was whether the MLS can build and operate a public facing website using general funds of member dues and fees or not. If something is a Basic Service of the MLS, then the answer is Yes. If something is not, and is rather considered as an Optional Service, then the answer is No.

Quite a few of the large brokerages pushed hard to have the public facing website declared as an optional service, and thereby prohibit the use of general funds. The below, as the most obvious example, is a letter from The Realty Alliance to the MLS Policy Committee.


It seems obvious to me that the real goal of The Realty Alliance is not simply to declare MLS public facing websites to be Optional Services, but to have them shut down completely:

That said, we are nervous that wording like, “substantially related to” is problematic policy. An MLS looking to initiate products and services that compete with programs of its broker participants could justify a wide variety of non-core programs with that vague standard. And, since we are not in favor of MLSs establishing public-facing listings display websites, we certainly do not favor leaving only the words, “establish or maintain” in the authorization to use our dues/fees/reserves as it is too wide an authorization. Significant dollars of ours could be spent “maintaining” these sites, including marketing and promoting these in competition with broker IDX sites.

Well, if Realty Alliance wasn’t happy with “establish or maintain”, then they probably weren’t too thrilled with the word “promote” being added to that. And then the entire statement — that establishing, promoting, and maintaining public facing websites — has been made into a Basic Service of the MLS.

Perhaps there will be more fireworks between now and the Board of Directors meeting, but the reaffirmation of MLS public facing websites was pretty loud and pretty clear from this morning’s proceedings.

Broker Opt-Out

But if the proponents of the MLS public facing website were happy, a detail that emerged during the discussion should worry them a bit.

Basically, it turns out that brokers have the right to opt-out of display on public facing MLS websites. (o.0) Apparently, that right has always existed, but… I don’t think more than a half-dozen people in the world knew that. Even Victor Lund of WAVGroup, who knows as much as anybody about this space, had to ask a couple of clarifying questions to make sure that brokers can do this.

The clear unequivocal answer is Yes.

So… if folks like the Realty Alliance are unhappy with the result, they have an obvious path: opt out of the MLS public facing websites. If enough of the large brokerages do this, the value of the MLS public website starts to approach zero. It’s awful hard to criticize Trulia and Zillow for being inaccurate when the MLS’s own website might have only 60% of the listings on the market because brokerages have opted out.

NOTE: the listings are still there in the MLS; just not on the MLS public website.

I expect that by Midyear 2014, we will have seen many of the large dominant brokerages to have done just this. This fight ain’t over by a long shot.

Anyhow, I know this is just a brief lick on the outside of the watermelon, but I figured I should get it out to y’all before both time and Internet run out.


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Rob Hahn

Managing Partner of 7DS Associates, and the grand poobah of this here blog. Once called "a revolutionary in a really nice suit", people often wonder what I do for a living because I have the temerity to not talk about my clients and my work for clients. Suffice to say that I do strategy work for some of the largest organizations and companies in real estate, as well as some of the smallest startups and agent teams, but usually only on projects that interest me with big implications for reforming this wonderful, crazy, lovable yet frustrating real estate industry of ours.

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