The Fantastical Fallacy of the MLS’s Demise

This article was originally published on Inman News:

Disruption, change and drama are the currency of reporting in the real estate industry. Impending doom, drastic restructuring or the exploding popularity of any sector of real estate generates buzz and it generates debate. This is healthy, and it’s to be expected.

It’s also often just nonsense. The structure of real estate in the U.S. has allowed the industry to be very successful at slowing the pace of outside technologies and trends that might alter its inner workings. Real estate changes, but it does so slowly. We all know this, some of us decry it, but the fact remains.

It’s interesting to view the current conversations surrounding multiple listing services within that mindset. MLSs have been recently said to be out of date, lacking in relevance, and nearing extinction. The emergence of popular property portals seems to have convinced some that a publicly run listing outlet will eventually overtake the entire online marketing space for real estate listings and there will be no need for MLSs any longer. It’s an intriguing possibility — and also one that lacks credibility on a number of levels.

The MLS isn’t a marketing portal. It’s an industry’s organizational communication tool. It’s a trade group’s standardization platform. It’s a B2B delivery mechanism for inventory availability. It’s a necessary component of every member’s business process and an enforcement authority to ensure proper usage and display at the same time. In short, the MLS is an entire portfolio of essential functions for the real estate industry. One of its many products, a listing feed, just happens to be displayed by many online marketing outlets.

Most MLSs are owned and run by Realtor organizations, and their members get a wide variety of their services and their organizational structure from their MLS. The MLS itself has empowered consumers, leveled the professional playing field, and provided a platform to greater data transparency than any other improvement in the real estate industry, possibly ever. It forces competing brokers to play fair, to be transparent, and to work for the betterment of the industry as opposed to solely their own brokerage’s benefit.

There’s currently a brokerage alliance hoping to form its own listing database platform, in an attempt to circumvent local MLSs’ control. The movement is being hailed as a blow to MLSs, but the idea itself seems less than revolutionary. There are successful MLSs in a number of locations that are already owned and run by brokerages, outside of Realtor organizations. A greater alliance of brokers creating a large association is nothing more than MLS consolidation, whether or not the ownership or administration changes. The intimation that this spells irrelevance for the MLS is frankly backward. The simplest explanation seems to be that these brokers value all of the inherent powers and structure of an MLS system; they just want to make the rules themselves.

Will MLSs change significantly in the coming years? Without a doubt, they will. There are new data agreements, syndication rules and structural changes happening daily across the country. The way the MLS interacts with its members and the online marketing world will always be in transition.

At the same time, any organization that intends to take over the space must first address some very unsexy topics. How will it create rules to ensure standard data input? How will it enforce those rules against its subscribers to ensure quality data output? How will it enforce a standard of co-brokerage among its member companies? How will it create significant barriers to misuse for its users that encourage proper agreements? How will it mediate and/or arbitrate commission disputes?

This is why successful technology companies often confine themselves to the advertising side of the business, and eschew the management of agents themselves. There are over 1 million agents working in the real estate. There are tens of thousands of brokerages. Far fewer of them would be working together in a harmonious way if there weren’t an enforcement entity with the teeth to ensure that they follow the rules of real estate cooperation. Enforcing rules and managing real estate agents isn’t a wildly profitable venture, as most brokers know. That’s why technologists usually stay away, and we, as agents and brokers, build our own organizations to do the jobs most won’t.

We can all appreciate the newest trends in the industry without throwing the strongest components of real estate under our literary bus. The MLS isn’t going anywhere. It’s not irrelevant. In many parts of the country, innovative MLS organizations have developed stronger marketing platforms than we’ve ever seen. Across the entire country, every MLS’ standards and structures continue to be the platforms that improve consumers’ understanding of real estate and promote a healthy, cooperative environment for agents.

There are a lot of successful new companies standing on the MLS’ shoulders. Let’s not assume that we can remove the foundation and the marketing facade will stand on its own. We’ve seen the Wild West of discordant listing sources in the past, and we’re light years ahead today. Dreaming of the MLS’ demise is blindly wishing for a fantasized version of business in the past which, frankly, never existed.


  • All opinions expressed herein are personal opinions and do not constitute the position or views of any organization. Sam DeBord is CEO of Real Estate Standards Organization (RESO). He has two decades of experience in the real estate industry, spanning real estate brokerages, mortgage lending, and technology consulting. He has served as President’s Liaison for MLS and Data Management with the National Association of REALTORS®, a REACH mentor, and on the board of directors for NAR, Second Century Ventures, and California Regional MLS. Sam began his career as a management consultant for PricewaterhouseCoopers. He is a recognized real estate industry writer for publications including REALTOR® Magazine, Inman News, and the Axiom Business Books Award-Winning Swanepoel Trends Report.