A road diverges, with one fork leading to technology and another to people.
Illustration by Lanette Behiry/Real Estate News

Is it time for MLSs to go their own way? 

The industry is at a crossroads as lawsuits threaten long-standing policies. For multiple listing services, separating from associations may be the answer.

January 13, 2024
3 minutes

Key points:

  • Decoupling MLSs and Realtor associations could help protect MLS organizations from ongoing antitrust litigation.
  • Lawsuits aside, separating could also improve MLS management, according to the latest Swanepoel Trends Report.
  • MLSs should be structured as for-profit businesses, while Realtor associations should be nonprofit organizations, the report recommends.

Much of the discussion — and litigation — around buyer agent compensation has focused on the National Association of Realtors, major national brokerages and their agents. But those aren't the only groups with a big stake in the outcome of commissions cases: The future of multiple listing services has also become less certain. 

As industry-disrupting lawsuits work through the court system and the Department of Justice keeps its eye on compensation-related rule changes, can MLSs continue to survive as providers of accurate listing information? Or will they disappear, swallowed up by for-profit portals?

The role of MLSs, and their relationship to NAR and local Realtor associations, is one of the topics analyzed in the 2024 Swanepoel Trends report and discussed in a webinar hosted by T3 Sixty's Jack Miller and Clint Skutchan. 

[Note: Real Estate News and T3 Sixty share a founder, Stefan Swanepoel.]

The best path forward for MLSs, said Miller and Skutchan, is one that many considered unthinkable until recently: separating the MLS from Realtor association ownership and management.

That separation, or "decoupling," can either happen organically, or the courts or government could intervene. Following the Sitzer/Burnett verdict on Oct. 31, more than a dozen new class action lawsuits have been filed — and many have named local real estate associations with owned MLSs as defendants. The DOJ has also been taking a closer look at industry rules and operations as it reviews the proposed MLS PIN settlement in Massachusetts.

MLSs that are owned by local associations can end up in the "crosshairs" of these upcoming antitrust litigation cases, Skutchan said, so associations may want to be more proactive about finding a solution.

Even without the court litigation, separating MLSs from Realtor associations might be the best move for the survival of the MLS. The Trends Report points out that the purpose and organization of a Realtor association is much different than an MLS — and running an MLS requires different skills.

"MLS governance would improve with more broker involvement, as brokers rely deeply on the MLS to operate their business daily, and understand the technical and functional services they need to offer," the report notes. "Fundamentally, MLSs should be run as businesses and local Realtor associations as a member-based nonprofit."

When a Realtor association and an MLS are intertwined, Skutchen noted, they often run into challenges, such as underfunding for the MLS and high turnover of talented workers.

"There's not a lot of financial gain for someone to come in and run a volunteer-structured organization," Skutchan said.

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