Since the Biden Administration announced their priority to “un-tie” real estate 4 years ago, I have been urging my MLS clients to get serious about opening up their subscription services to all licensees.
38% of MLSs are Open Today
According to NAR data, 38% of MLSs today sell services to all licenses, not just REALTORS®. Many have operated as Open MLSs for 20+ years, while their shareholder associations continue to thrive.
Open MLSs have been working for 30+ years
We hosted a webinar a few months ago featuring 3 of the most successful MLSs that have been “Open” MLSs for 30+ years, highlighting the advantages and discounting some of the false perceptions surrounding Open MLSs. The panelists addressed several common concerns about Open MLSs.
Common Concerns about Open MLSs
Are Non-REALTORS less ethical than REALTORS?
The panelists underlined that many of the fears of Open MLSs are unfounded. While many are concerned that non-REALTORS are not bound by the Code of Ethics, Open MLSs include a “Code of Conduct” in their Rules and Regs that mirror the key tenets of the code of ethics. When asked if non-REALTORS® were responsible for more Code of Conduct violations than REALTORS, the panelists emphatically said no.
Fear of Association Membership Losses
Others with Closed MLSs worry their association will lose a high percentage of members if practitioners are allowed to join the MLS directly. While the panelists understood this concern Associations in their markets did not experience significant Association membership losses.
Can Associations really attract members without the MLS?
NAR has always preached that Associations need to clearly communicate their value proposition excluding access to the MLS. NAR also consistently coached Associations not to rely solely on MLS revenues for their survival. Instead, build a budget based on the revenues of Association programs.
I have urged the myriad of Associations and MLS organization that participate in our WAVes of Changeprogram to seriously consider the advantages of having more inventory to sell and more brokerages represented provided by an Open MLS. I have also highlighted that several states are required to offer an Open MLS because they lost lawsuits 30+ years ago including Florida, California, Alabama, Georgia, Massachusetts and several others and these markets have flourished.
Recently, the need for an Open MLS just became even more real. Douglas Hardy, M.D., the broker-owner of Signature Sotheby’s International Realty in Southeastern Michigan, which has about 100 agents and brokers; Glenn Champion, Esq., a primary broker for the same brokerage; and Dylan Tent, an agent with the same brokerage, filed the complaint on behalf of all agents and brokers in the state of Michigan who are required to be Realtors to access the MLS. The brokerage is suing NAR, MLSs and local Association in Michigan for forcing Michigan real estate agents to join an Association to get access to the MLS. According to the complaint this is an anti-trust violation because it is tying the requirement to join one corporation to have the right to join and pay for another organization. The suit alleges civil conspiracy, economic coercion and unfair restraint of trade.
Forcing practitioners to join one organization to get access to another is, in a nutshell, outdated, dangerous, and some would argue, even illegal thinking.
Here’s the bottom line for any real estate organization; if you have a policy that forces customers into a behavior, you need to take a serious look at it. Lawyers are paying very close attention to our industry right now and looking for ways to challenge every policy they believe can lead them to a billion-dollar payout.
Associations have a very strong foundation to stand on – professionalism, education, advocacy and community good works make for a compelling value proposition.
It’s critical to drive home these benefits since it may not be long before an Association will not be able to borrow the value of an MLS to attract and retain customers.
Watch Open MLS Webinar Here
