Against the backdrop of foundational questions regarding the purpose and future of the MLS, Carter said that the actual definition of an MLS is something that people need to remember.
“I’m not a listing mechanism. I’m a broker cooperative. I’m a mechanism by which brokers have agreed to cooperate with each other in order to bring buyers and sellers together,” Carter said.
Cowen emphasized similar principles. When asked if the structures or governance of MLSs will fundamentally change in the next three years or so, she pointed to the “core mission of the MLS—ensuring a fair, transparent and efficient marketplace.”
While Clear Cooperation remains a headline-grabbing debate as brokerages and companies continue to navigate the nuance of that specific policy, the bigger picture of how MLSs need to operate—and the kinds of rules that are (at least largely) safe from legal challenges—is maybe more significant.
Internally, Barbaro said he believes the pushback against NAR rules or MLS policies is rarely as consistent or firm as it seems.
“Every time I have a conversation with someone (on these issues), I’m saying, ‘So you want an MLS with no rules?’ And they say, ‘Well, no. I believe in rules. This rule is a bad rule, the rule that I got caught on—that’s a bad rule,’” he said. “You’ve got this group of people on Facebook that (are) all like, ‘I hate the rules.’ But they all hate one different rule.
“It’s part of navigating the waters of a subscriber organization,” he continued.
Lund said that MLSs are frustrated, after having to shoulder “some” legal costs (although NAR and big brokerages paid most of them, he notes), as well as quickly change their policies and then educate members following the commission lawsuit settlements. MLSs are also bearing a larger burden from new insurance terms mandated by NAR, Lund said, as in 2025, they now have to keep a certain amount of money in reserve before insurance “kicks in.”
That new requirement of setting aside cash amounts to an “existential crisis” for smaller MLSs, Lund claimed, who don’t have a lot of financial resources or wiggle room. Whether that drives consolidation, or potentially pushes these smaller MLSs to make other changes, is something that is still unclear.
With the Clear Cooperation debate seeming to show significant divisions in how real estate professionals want their MLSs to govern, where is there a potential for more change in terms of who manages the MLSs, and how?
Lund said MLSs are “generally” sticking with constitutions and governance, despite misgivings toward what happened at the national level. Although the dispute between the Phoenix Association of REALTORS® and NAR drew national headlines (before being resolved months later), and multiple lawsuits by brokers have attacked those connections between NAR and local listing services, that hasn’t actually translated to more MLSs going independent.
On the other hand, Lund singled out what he views as the crux of the Clear Cooperation debate—companies wanting more exposure and attention from listings—as something that could drive some new policy conversations.
“A lot of brokers, especially large ones, understand that there’s enormous strategic value to marketing a listing before it’s contributed to the MLS, because once it hits the MLS, its vast distribution array makes it very difficult for that broker to be recognized as the seller for their listing,” he said.
Rules and class actions
While certain tweaks (like mandating broker information on IDX feeds) can help, it doesn’t go far enough for some companies, and contributes to consumers not really knowing who their agent is working for. “Befuddled” buyers and sellers struggle to grasp these complex relationships between “intermediaries,” Lund claimed, as independent agents, franchisor companies, portals, MLSs and local associations all have a part in the real estate transaction.
“One of the things that I think MLSs are going to need to face in the future is the rationale behind offering IDX as a service,” he said.
From his perspective as a former regulator, Bell points to history—looking all the way back toward the early 20th century, when REALTORS® came along and established themselves as a bulwark against the curbstoners. At that point, NAR’s Code of Ethics and the push to establish real estate licensing laws were welcomed by consumers and regulators alike.
But that has changed, Bell said.
“As time went on, the REALTORS® started imposing more and more rules and more and more mandates. I think a lot of people said, ‘We don’t like these mandates,’” Bell reflected.
Additionally, the commission lawsuits and subsequent media coverage have created the perception that many or most REALTORS® are not following these codes, or that the rules are now bent to benefit agents rather than buyers and sellers, according to Bell. That makes the potential for pushback from consumers more likely, especially if legislators (or antitrust lawyers) get involved.
Bell said he can envision NAR giving in and allowing rules that open up the MLS somewhat, where MLSs will “share certain information” with non-REALTORS®, but added that NAR has too much at stake to give up on those foundational MLS policies like mandatory submission.
“What is your argument as a consumer? ‘Well, this isn’t fair.’ Well, hire a REALTOR® who has access,” he said.
How about in regard to who creates these policies, though, and national “model rules” created by NAR? With reports that a number of MLSs stopped enforcing Clear Cooperation following the commission lawsuits and a (still ongoing) Department of Justice (DOJ) investigation, and other signs of dissent regarding NAR rules, could the manner in which rules are created at MLSs change?
“I think one of the things that’s going to put strain on the MLS in general is the notion of an association owning an MLS,” Lund said.
That somewhat unique and precarious structure—associations effectively controlling an MLS, sharing officers and employees—creates significant pitfalls, and is a very difficult balance to maintain, according to Lund.
“You have one that’s profitable and one that’s not profitable. If they pierce that corporate veil, which could happen by mistake, they could owe a tremendous liability in back taxes, for they could lose the nonprofit status of their association,” Lund said.
But that danger is not necessarily new, and most MLSs have (seemingly) been able to avoid running afoul of this dynamic. Is that going to change in 2025?
Doug Miller is a real estate attorney who served as a key impetus behind the original commission class-action lawsuits. He currently hosts regular educational sessions for consumer lawyers, with a specific real estate focus.
He said that the way REALTOR® associations and MLSs are controlled, and the types of information and access they hold onto, are “by definition a restraint on trade.”
“It’s the MLSs, the REALTOR® associations who have these forms. They don’t allow access—they don’t allow access to the forms or the properties, or the data for that matter. You can’t even get the seller’s disclosure statement unless you’re a member,” he said.
These concerns appear to have made an impression on at least some in the MLS industry, with REcolorado, which was recently sold to a private buyer, citing the potential for litigation as part of the motivation to “decouple” from the two associations which previously owned it (although notably, the new owners themselves are heavily involved in a company that provides forms to the MLS).
But real estate professionals have long decried the fact that rules and policies being singled out as antitrust violations are decades old, questioning why lawyers are suddenly coming after agents and brokers and seeking billions of dollars in damages for established, long-standing practice.
Asked why there haven’t been lawsuits focused on the MLS-REALTOR® association relationship, Miller said that lawyers so far have struggled to understand the complex interconnected relationships and responsibilities, and that these things are also difficult to explain in front of a judge or jury. Rules and practices are often localized as well, making it a further challenge to put together a broad-based case.
But that could be changing, Miller said, as lawyers see the success of the Burnett case, and if the industry continues to operate as it does currently. He specifically points to the practice of associations drafting forms that include broker-to-broker compensations—something that at least a few real estate companies have also warned is problematic.
“MLSs are vulnerable. The big brokerages are vulnerable. The REALTOR® associations are extremely vulnerable with what they’re doing with these forms. There’s no other industry I can think of where all the competitors get together and draft a fee agreement,” Miller said. “It’s not going to take long to find somebody or have somebody reach out to (a lawyer) who’s been harmed by that.”
