The MLS opportunity: Open access, raise the bar
"Codes of Cooperation" established by local MLSs — rather than national, top-down rule-making — can strengthen professional standards and modernize practices.
Key points:
- Two decisions made at NAR's annual conference this month point to a broader shift in national vs. local governance.
- Concerns about MLS access should be addressed at the local level by organizations that know their market — and are empowered to adopt rules that serve their members and goals.
- By leaning into this moment, MLSs have an opportunity to lead while raising the bar for the industry as a whole.
Thinking big about residential real estate success requires a big-picture perspective. Industry Decoded features industry experts who can enrich your understanding of issues affecting the industry as a whole.
Sometimes events that seem unrelated on the surface can, when taken together, reveal something larger beneath them. Two decisions were made this week at the NAR annual conference that illustrate this dynamic.
First, NAR repealed a long-standing policy that required association membership as the entry ticket to MLS access, shifting that decision squarely to local associations and MLSs.
Then, the NAR Delegate Body, which controls revisions to the NAR Code of Ethics (COE), rejected the NAR Board of Directors' decision to expand disclosure of referral fees under Article 6 of the COE, which would have given consumers more transparency around how, and how much, their agents get paid from other brokers and third parties.
One action concerns membership and MLS access. The other concerns transparency and compensation in the context of professional standards. They might seem unrelated — until we contemplate a core argument opposing allowing non-Realtors access to MLS services: "We can't allow non-Realtors into the MLS because they aren't bound by the Code."
This is a common objection by local leaders, but maybe it's the wrong answer to the wrong question. The more honest question might be: What exactly are we trying to protect, and is the COE the only way to do it?
Ethics, cooperation and local governance
The COE separates "ethics" into two general buckets:
Duties to consumers and the public. Think honesty, fiduciary duties, handling of trust funds, fair housing, truthful advertising, etc.
Duties to other real estate professionals such as cooperation, respect for exclusive relationships, showing etiquette, arbitration of disputes, and so on.
Today, the first bucket is largely addressed by state license law (which wasn't around when the COE was first created). License law is there to protect the public, and most of the standards that were once unique to the COE have been folded into state statutes or regulations such as agency duties, anti-fraud rules, handling of client funds, anti-discrimination and advertising requirements.
State regulators own the job of protecting the public, and they have far stronger enforcement tools than any association peer-review process. And these rules apply to all licensed professionals, Realtors and non-Realtors alike.
The more pressing issue is what rules or standards should govern the essential value proposition of the MLS: professional cooperation.
And if we get real, when the local leader says, "I don't want non-Realtors in the MLS," they are usually worried about the second bucket:
Will agents — regardless of association membership — follow the same cooperation and data rules?
Will they honor offers of compensation, showing and offer protocols, and arbitration decisions?
Will they respect exclusive relationships and avoid interfering with existing client contracts?
In other words, will I, a Realtor, be disadvantaged by a separate set of rules that don't apply to non-Realtors?
Those are legitimate concerns. But if NAR is truly supportive of non-member access to MLSs as they professed this week, these should be MLS concerns, not NAR's.
Nothing in NAR's new MLS policies prevents an MLS from adopting its own set of professional rules that govern how all participants must behave toward one another inside that marketplace. In fact, it can be argued that NAR effectively pushed that responsibility down to local MLSs anyway.
Real estate is local. It follows that the professional standards of practice between professionals should also be local. And if this were the case, we would not be beholden to an archaic regime involving around 1,500 people (yes, that number is correct) in NAR's collective Board of Directors/Delegate Body that imposes rules on the way real estate professionals work with each other.
A blueprint in Washington state
Northwest MLS (NWMLS), which covers much of Washington state, has already shown what local governance can look like.
While the referral disclosure vote in Houston landed with a thud, the same issue was handled cleanly and with far more clarity by NWMLS. On June 25, 2025, NWMLS issued a new Referral Disclosure form that spells out, in plain language, who is referring whom, to where, and at what fee. It added a referral section to service agreements so the disclosure appears at the moment the consumer is asked to sign, not buried in an afterthought.
There was no national vote, no Delegate Body, no long preamble about parliamentary procedure. It was a practical decision made by a local organization that owns its forms, understands its market and can act without waiting for a national consensus.
That difference matters. It shows that large regional MLSs can modernize rules and consumer protections more quickly than a national body with thousands of decision-makers. It also shows that genuine reform is more likely to come from organizations that have an incentive to keep their own marketplaces functional because business is done at the local, not national, level.
A model worth building on
An MLS that wants to open participation and raise standards at the same time can create a modern Code of Cooperation built around principles that reflect how the business actually works at the local level, centered around three core pillars:
License law alignment for consumer and public duties, such as requiring all participants to remain in good standing with the state licensing authority and triggering MLS sanctions in the event of state discipline.
Professional conduct rules inside the MLS, such as honest, timely and accurate listing data and status changes, and clear rules on showings, access, offer presentation and respect for exclusive representation agreements.
Transparency standards that go beyond the current COE, such as mandatory disclosure of referral fees and other third-party compensation, modeled on NWMLS's approach with required forms and fields, not just aspirational language.
All of these provisions can be written into MLS participation agreements and rulebooks and enforced through local MLS processes. And most importantly, the membership status of the participant — Realtor or non-Realtor — becomes irrelevant.
Realtor membership should be optional — standards should not
NAR's latest decisions only reinforce that view. NAR is stepping back from top-down MLS rule-making, and we continue to witness how difficult, time consuming and bureaucratic it can be to drive aggressive reforms to industry practice.
Making NAR membership voluntary does not equate to a watering down of professional standards.
If MLSs lean into this moment by building their own, modern Codes of Cooperation that apply to all MLS participants, they can open access, support competition and raise professional standards at the same time.
Russ Cofano is the co-founder and principal of Alloy Advisors. He has more than 30 years of senior leadership experience in brokerage, technology, MLS, associations and affiliated businesses. Previous roles include president and general counsel of eXp World Holdings and SVP of industry relations at Move, Inc. The views expressed in this column are solely those of the author.