One of the longest-standing issues that has frustrated those both inside and outside the MLS industry is a simple one: There are too many MLSs. While that statement would have been controversial not too long ago, today, it would be difficult to find someone who is willing to argue that having a hodgepodge collection of around 500 separate listing services is in everyone’s best interest (or even in the MLS’ best interest). At this point, the consolidation question is more about “how” and “when” than “if.”
The motivation to consolidate should be relatively obvious to most real estate practitioners. On a basic level, having hundreds of different listing services—with their own governance, processes and technology—is just not efficient when agents and brokers need to access listing services anywhere. Multiple membership fees are a financial burden, especially for smaller companies, and smaller MLSs struggle to provide services or maintain compliance (particularly after the NAR settlement).
Victor Lund, managing partner of MLS consulting firm WAV Group, said that right now they’re working on around half a dozen consolidations, which isn’t any more than usual. That doesn’t necessarily mean that 2025 won’t see an increased urgency to consolidate, though.
“I think consolidation needs to be done in a way that is beneficial to all concerned. And growth for growth’s sake is not a strategy,” Lund said. “We’re really looking at the smallest MLSs in the country…those entities would be better if they consolidate to get up to that number where they can operate a business and deliver a service.”
Merri Jo Cowen, CEO of Stellar MLS, told RISMedia that “even considering consolidation is a bold step,” though it needs to happen “where consolidation makes sense.”
“Being able to sit back and truly evaluate the benefits and potential drawbacks of merging or consolidating takes courage and the foresight to set aside fears and politics to see forward to the opportunities (that) can result,” she added.
With a recognition that the MLS industry must shrink, what does consolidation actually look like, though? Could there be a single “national MLS” in the relatively near future that can effectively replace the sprawling, localized system? How small is too small, and how big is too big?
Art Carter is the CEO of the California Regional Multiple Listing Service (CRMLS), the largest single MLS in the country with over 100,000 members. He hopes that recent debates about policies like Clear Cooperation can help lead to “a bit more understanding of what the multiple listing service brings to the table”—and through that, more willingness for MLSs to join forces.
When asked what the endgame is for consolidation—and if a national MLS is the goal—Carter offered a more nuanced assessment.
“I always caution people to be careful what they wish for. You have one national MLS and they make a decision you don’t like—it’s a little bit difficult to get those decisions changed,” he said. “Competition in the MLS business is something that is good for brokers and agents, (but) at some point, we need less than what we have.”
According to Carter, around 260 MLSs claim less than a thousand members, while the remaining 240 or so serve 70% to 80% of practicing agents. He added that the ideal balance—one MLS per state, one per “region,” or something else—is not clear yet.
Lund throws out a number—5,000 agents—as a rough approximation of where MLSs can start to provide their own services instead of needing to rely heavily on third parties for basic infrastructure. While that doesn’t necessarily mean smaller entities need to consolidate, it does draw a line between MLSs that offer a service, versus those that are essentially “pass-through” companies that cannot realistically offer the same type of value as the larger MLSs.
Michael Barbaro is president of SmartMLS in Connecticut. His push to consolidate the many MLSs in his small state was the subject of a National Association of REALTORS® (NAR) case study back in 2017. While he also didn’t offer specifics on what consolidation should look like, Barbaro said he expects to see more “reactionary” moves from MLSs, rather than proactive changes.
“The easier thing to do is to say, ‘Well, what does it look like if I win and I don’t care about anybody else?’ That’s easy. Everybody does that,” he says.
Consensus-building, which requires asking what’s going to be best for everyone (not just agents and brokers, but vendors and consumers as well) is the hard part, according to Barbaro. It’s also why something like consolidation is a slow process.
Incursions and inroads
What about outside competition—either from the portals or startups that have sought to offer alternative listing services (with relatively minimal success)?
Another MLS executive, who was granted anonymity in order to speak candidly, expressed more frustration about how the industry has moved on these issues, saying that MLSs have historically “tiptoed” around things like consolidation.
This executive points out that while agents complain all the time about portals like Zillow, they continue to rely on (and pay) those companies for leads, data and other support. The executive also said they generally believe that agents will stand up for the MLS system (despite many having numerous complaints about that as well), but added that real estate leadership is strategically outmatched.
“We have the wrong leaders. If I was a broker today, I would look at my entire leadership team and say, ‘I need to look at each one of you and decide if you should be here or not. Probably most of you shouldn’t be here,’” the executive said.
In the current climate of upheaval, worries that outsiders could step in to replace the MLS are once again growing, according to Lund, and are maybe at a higher level than at any time in recent history.
“I think there is significant concern around the entire industry about the role of the MLS and how it can endure moving forward,” he said.
With legal challenges and new technologies, is the MLS industry once again facing the prospect of being entirely supplanted by a well-funded portal company, or even localized listing startups?
Barbaro sees significant obstacles to that, for a few reasons.
“I think you’re going to see people try—by the way, two of the big portals out there already have an add/edit and can very easily convert themselves to a national MLS,” he said.
But in the end, Barbaro said agents and consumers don’t want the “closed marketplace” of a national portal listing service, where a public company can squeeze everyone for more money and steer both agents and consumers to use only their services.
Additionally, Barbaro said that any disruptor has to meet agents and consumers “where they are,” offering a system and a product that serves both sides’ needs while not upending the familiarity that agents especially value in their MLS—something that’s extremely difficult and nuanced. Even tweaks within current MLSs are difficult to get members to accept, he said.
Amit Kulkarni, BrightMLS chief marketing officer, said that portals really haven’t tried to do what an MLS does, even as they have outpaced them in more superficial ways.
“The core distraction (in real estate) is, ‘Hey, let’s all fight for internet traffic when it doesn’t actually matter,’ because the vast majority of people are still working with their agent on the MLS to consummate the transaction,” Kulkarni sayd. “I think what the MLSs have done very poorly is actually deliver technology that actually helps them deliver better service to agents so they (provide) better services to their clients.”
Wayne Bell is a licensed broker, lawyer and former Real Estate Commissioner in California. He said that replacing the MLS system with something new—specifically anything not largely controlled by REALTOR® associations—is very unlikely, for a different reason.
“I don’t see it happening because the organized real estate folks…they meet with legislators all the time,” Bell explained. “I don’t see it happening without some kind of legislative effort. And I don’t view that as something that’s going to happen in the near term at all.”
