In the U.S. real estate market, Multiple Listing Services (MLSs) play a pivotal role that resembles a form of monopoly, though it may not fit the strictest definition of the term. Initially, MLSs were established as cooperative agreements among licensed brokers to share property listings with each other. Over time, these organizations have grown into substantial entities, generating significant revenue through membership fees. For a considerable period, agents exclusively held the keys to these listings, serving as the sole gateway for clients looking to buy or sell properties. However, the advent of the internet has ushered in a new era. Following numerous legal battles, listing data that was once closely guarded by MLSs is now widely accessible to anyone with an internet connection.
The inability to be the gatekeeper of property listings did not lead to the end of MLSs, as one might think. You might be able to see listings on a number of public websites but if you want to create those listings, you need an MLS subscription. This member benefit, along with others like smart locks for showings and document libraries, is what keeps most agents subscribing to their local MLS. The problem with this arrangement is that agents have no other option to list their properties.
Brokers and agents are learning this the hard way in some parts of the country. Last week one of the tech vendors that many MLSs use named Rapattoni became the victim of a cyber hack that has taken some of their critical data and hampered the ability of their clients to upload new listings. The MLSs affected have scrambled to find alternatives, which is good because there has been no news from Rapattoni with even as much as an update on what exactly happened or when they expect service to be restored.
One of the multiple listing services affected was one that services Northern California called BAREIS. I have actually used BAREIS in my past life as a broker and I can say from experience that their interface was (and probably still is) lacking, especially compared to what is available for free on sites like Zillow and Redfin. Imagine if our real estate listings were not controlled by a monopoly like a local MLS, in the event of a hack like just occurred users could just switch to another service. But that is not the case, no one else has the ability to list properties in the areas except BAREIS and so as one local agent explained, “As far as updating listings, we still have no way of doing this. We can search via a reciprocal MLS (MetroList) but are unable to enter new listings ourselves or change current listings.”
I have no misconceptions that we will be able to rid ourselves of the MLS structure in America. Not only do they have a lot of power locally, their parent organization NAR (which I have written about before) also happens to be one of the largest spenders in the country when it comes to political lobbying. We talk so much about how slow innovation changes real estate and the blame generally goes on the people working in the industry. I think that is unfair. From what I have heard from most property pros is that they would love to have more innovative solutions, they just don’t know how that can happen as long as they are inseparably tied to their local MLS and all of the out of date tech that they are forced to use.
Just how complicated is the nation’s network of MLSs? Take a look at this dizzying map that shows just how many different MLS organizations exist in the country.
Two class action lawsuits have been filed against the National Association of Realtors for its role in the well documented segregation of many American cities.
Trust in the shadows
The struggles of some of the largest property companies in China are starting to compound thanks to the country’s shadow banking industry that relies on trusts (many of which are owned by the real estate companies) for loans.
The rent fixing lawsuit against Realpage looks like it will go forward after a federal judge declined to dismiss tenants’ claims against the defendant.