MLS serves as sports infrastructure

The Multiple Listing Service (MLS) is losing its original purpose, and this is a concern for the real estate industry. The trend of MLS politicization must end to restore trust.

According to the author, the MLS was created to facilitate the voluntary sharing of listing data between agents who have sellers and agents who have buyers.

This cooperative spirit allows a one-person boutique firm to compete for the same listing as a national franchise, and gives consumers access to more market information than buyers and sellers in many other countries.

The MLS should operate as a cooperative without profit motive, not as a lead generation platform or a monetized product.

When a listing agent wins a listing, they have prospected, built a relationship, and earned the seller’s trust – that is where the real value is created.

However, the industry has allowed the agent who did the work to win the listing to increasingly surrender the customer relationship and marketing ability to platforms that did not create the value.

The MLS is not a product, it is infrastructure, and there is a meaningful difference – infrastructure serves participants who built it, while a product generates revenue for whoever controls it.

Some decisions made around listing distribution and internet display in the early days of the internet should be reconsidered given the market dynamics today.

The MLS is becoming increasingly politicized, with rules written with specific business models in mind, which erodes trust in the system.

Politicization of the MLS

Policy decisions are made based on which firms they advantage or disadvantage, and this erodes trust in the system. The MLS only works when everyone trusts it.

Without trust, the market becomes fragmented, with data living in silos, and consumers lose transparency.

Howard Hanna, a long-established brokerage, has invested heavily in listing technology, data management, and protecting intellectual property connected to listings.

Brokers are trying to respond to changing consumer expectations with controlled distribution strategies and products like HannaList and Find It First, which are attempts to modernize marketing strategy while still participating in the cooperative framework.

Broker Engagement in MLS Governance

Broker leaders who do not engage in MLS governance need to change this, as disengagement allows narrower interests and institutional inertia to fill the vacuum. They must take an active role to ensure the MLS serves the needs of all participants.

Boards that function more like regulatory bodies than strategic partners can lead to brokers viewing their MLS as a regulator rather than a cooperative partner. This is not the intended purpose of the MLS.

The MLS needs to become a neutral data services cooperative serving horizontal competitors without deference to business model and without an appetite for monetizing inventory brokers created.

This means equal standing for every participant, and the MLS providing infrastructure within which the market picks winners, not dictating every aspect of public distribution strategy. It should provide a level playing field for all participants.

Howard “Hoby” Hanna IV, CEO of Howard Hanna Real Estate Services, believes in the MLS and its original purpose, and thinks protecting it requires neutrality, trust, modernization, and a clear understanding of its role. He emphasizes the importance of preserving the cooperative spirit of the MLS.