In the midst of my third migrane from sifting through the ton of articles and viewpoints on the pros and cons of the Clear Cooperation Policy (CCP) and the explosive portal wars taking place, I ran across an article addressing a question starting to surface — is the MLS on its last breath? Can it survive all this disruption?
The article line that grabbed my attention was “A world without the MLS is a Wild West Show” — It appeared in the Keycrew Journal in a interview of a multi-talented real estate industry veteran , and a good friend and fellow New York collegian (he from Iona and me Hamilton) — his name is John Heithaus CMO at Ocusell. The article is entitled “Tech Giants Redefine MLS Standards in Shifting Real Estate Landscape.” John was kind enough to allow us to republish the article.
After the article, I’ve added some quotes from some of the key players in this new landscape.
Now we’ll turn the stage over to John Heithaus
A world without the MLS is a Wild West Show… it’s like not having a Department of Motor Vehicles and buying a new car,” says John Heithaus, Chief Marketing Officer at Ocusell. His comparison illustrates a notable shift in the real estate industry—private technology companies are increasingly establishing standards traditionally set by industry associations.
New Governance in Real Estate Data
The Multiple Listing Service (MLS) has served as the foundation of real estate transactions for over a century. These systems have evolved from paper listings to sophisticated digital platforms, with most owned by local Realtor associations operating under National Association of Realtors (NAR) guidelines.
According to Heithaus, we’re witnessing “the beginnings of a rules-based society, a rules-based business model that we’ve never really seen before to this extent.” This change isn’t about replacing the MLS but rather about who determines the standards for how it operates in the digital age.
“The MLS is more important than ever, and there’s no getting around it,” Heithaus emphasizes. “The world without an MLS would not be pretty, as flawed as it may be, or old school in some aspects, and slow moving in some markets.”
Zillow’s Expanding Influence
The most visible example of this shift is Zillow’s recent moves to establish its own listing standards. Zillow and eXp Realty announced a “consumer-first commitment to real estate transparency,” with eXp Realty pledging to post listings in the MLS within one day of publicly marketing them to consumers.
More significantly, Zillow declared it would ban homes initially marketed only to select buyers from appearing on its platform—a direct response to a new NAR rule allowing sellers to delay broadly marketing their homes.
“Zillow is stepping in for NAR’s role to regulate something at a national level,” Heithaus observes. This represents a fundamental power shift in the industry, where a private company is effectively enforcing standards traditionally established by industry associations.
The Enduring Value of MLS
Despite the changing landscape, Heithaus maintains that the MLS provides essential functions that cannot be easily replaced. “[The MLS] provides every attribute of a well-functioning real estate market—property listing, representing buyers, public records, property history, detailed photos, environmental information, neighborhood data—everything.”
With a market cap of $15 billion, Zillow could theoretically attempt to replace the MLS system, but Heithaus argues they should have no interest in doing so: “Who wants to be the MLS? It’s like taking over the motor vehicle department. Think of all those people, the yelling and the screaming and the paperwork… who in their right mind would want to take that over?”
Industry Consolidation
As technology companies assert more influence, the MLS landscape itself is changing. “The larger MLSs are going to have to become more dominant, and they’re going to have to merge somehow,” predicts Heithaus.
This consolidation is already underway. “Some MLSs are breaking down their borders. They’re doing more than just data sharing,” Heithaus explains. Some forward-thinking MLSs are even building their own databases to reduce dependence on traditional MLS software providers.
Yet Heithaus cautions against wholesale reinvention: “We need to get back to fundamentals and understand that the foundation [of the MLS system] is solid and doesn’t need to be replaced. It just needs to be modernized and built on.”
PropTech’s Supporting Role
Technology companies are finding opportunities to enhance rather than replace the MLS ecosystem. “That’s where good PropTech comes in,” says Heithaus, noting companies working on innovations like AI-powered photo parsing and other tools that make the existing system more efficient.
These technologies help MLSs create “more cooperative business arrangements, which are better for consumers and better for agents, because it’s creating more commissionable opportunities.” The goal, according to Heithaus, should be to “circle around the MLS and find ways we can make it better, not tear it down.”
Navigating the New Landscape
As private technology companies increasingly set the rules for real estate data sharing and marketing practices, the industry faces fundamental questions about governance, access, and control. The traditional model where industry associations like NAR established standards is giving way to one where market-dominant platforms can effectively enforce their own rules.
This shift creates both opportunities and challenges. Technology companies may move faster and adapt more quickly to changing market conditions than association committees. However, their primary responsibility is to shareholders rather than to the broader real estate ecosystem.
For real estate professionals, understanding this evolving dynamic is crucial. The MLS remains central, but its development is increasingly influenced by forces outside traditional industry structures. While the foundation of real estate data sharing remains intact, the question of who shapes its future—and how—continues to evolve.
RELATED QUOTES FROM AROUND TOWN
Glenn Kelman Redfin — “For our entire history, Redfin has upheld one bedrock principle: You shouldn’t have to engage a broker to see all the homes for sale or even to buy one. The only reason people should hire us is because they value our service.”
Interview with Saul Klein on Sept 15, 2024: John and I spoke of this in detail yesterday. The DOJ is confused. Eliminating Office Exclusives while extending the timeframe to submit listings is self-defeating. I have never been a fan of “office exclusives.” The purpose is, for the most part, to let listing brokers find buyers for their listings without submitting to the MLS…”Double Ending.”
If the DOJ wants to end office exclusives, that is ok, as it is in the public’s and the MLS’s best interest to have all listings entered into the MLS for transparency, fairness, and marketability. Office Exclusives are vestiges of the past, a work around to allow for non-submission to MLS (there may be some exceptions for privacy of certain sellers giving “informed consent.”).
Extending the time for submission to say, 60 days (per the DOJ unrealistic suggestion), in essence, allows for all listings to be “office exclusives” for the first 60 days. At least with the requirement to get a form signed for an office exclusive, there is some level of seller consent.
The DOJ is all screwed up. Saul
Vanessa Saunders: Regarding the CCP policy debate, “NAR’s role in all of this? Let’s just say they’re still trying to reboot the router while everyone else is livestreaming new policy frameworks.”
Ed Zorn: Open letter to Notorious Rob podcast. — While a virtual office website (VOW) can be used to deliver brokerage services directly to a consumer using internet technology, a VOW can also be used for marketing. These are not mutually exclusive concepts….there is a distinction between being a “consumer” visiting a website and a “client” of the brokerage firm.
The establishment of a broker-client relationship, including the signing of state-required disclosures prior to gaining access to the Private Exclusives, is very different from viewing properties directly on the VOW website.
True “seller choice” means that an off-MLS listing agreement should be open and never exclusive.
Rob Hahn — What Zillow seeks to prohibit, then, are future violations, which do not exist today: Office Exclusives on VOW. Every other form of public marketing, such as yard signs or social media posts, would trigger CCP. Only display on VOW does not, will not, and cannot trigger CCP. Zillow is going after that “doesn’t-exist-today violation” with its very big announcement.
In her direct-to-the-point style, Summer Goralik wrote on her Expert Compliance website that “While the focus is on expanding ‘seller choice’ it raises the question: What about the buyers? Yes, buyers — while not sellers — are also consumers who want to benefit from a consumer-oriented real estate industry that touts transparency. NAR left office exclusives intact while adding yet another listing status category or semi-transparency option with DMELs.”
Regarding “Days on Market” (DOM) and price change history, which are now optional at the local MLS level…. at its core, this data reflects objective facts about a listing — its market history and pricing trends — whether some prefer to keep it out of sight or not. Summer adds that “If I dust off my old Department of real estate investigator hat, I can almost guarantee that if agents have the choice and decide not to disclose DOM, it could spark regulatory complaints.
And if the new flexible listing option of CCP wasn’t enough to make your head spin, NAR also clarified that broker-to-broker communication does not trigger CCP. Could this lead to multiple off-market networks operating under the radar of the CCP, further reducing transparency?
But the real issue is that when buyers can’t access listings through independent brokerages, they’re more likely to find themselves working directly with the listing agent and/or the brokerage who holds the listing — and that opens the door to dual agency which needs to be examined in closer detail.
It’s clear to me that the conversation needs to shift. This isn’t just about brokers defending “seller choice,” a controversial stance on its own. It’s about licensed real estate professionals upholding and protecting consumer choice. That means ensuring buyers have the information and access they need to make fully informed decisions in their own best interests.At the end of the day, buyers aren’t trying to game the system; they just want to find the right home. But if we keep heading down this path, how can they trust they’re getting a fair shot in a market that’s already challenging, with limited inventory and high interest rates? The reality is the issue might not even be transparency at all — it could simply be that anything associated with NAR is viewed with suspicion. Perhaps CCP is being targeted not because of its function but because it’s an NAR-mandated policy, now painted with the broad brush of alleged anticompetitive behavior.
However, if there is no disclosure and listings are kept off the MLS without the seller’s full understanding, it becomes a risky practice — one that could lead to civil lawsuits and regulatory enforcement against both the agent and the responsible broker.
Quotes from Zillow’s Errol Samuelson and eXp Realty’s Leo Pareja and found in this press release: Press Release
In a wide ranging presentation hosted on YouTube, eXp CEO Leo Pareja said the brokerage would not use “delayed listings,” which is the tweak to CCP announced in March by the National Association of Realtors (NAR).
“We are not going to do it,” Pareja said on the call, referring to delayed listings. “When there is class-action litigation against our industry, it will be because of a flow chart that shows that you had to be a member of an association or an MLS to get access to the [delayed listings] data that was not made publicly available, and we’re just not going to participate in that.
Andy Florence CoStar CEO said that Zillow’s policy update was an “icredible move of audacity and a pure power play of epic proportion.”
Florence also said in an Inman Op-Ed that:
“If you feel that Zillow’s heavy-handed attempt to use their market power to force agents like you to list on Zillow within 24 hours is anti-competitive, you can let the DOJ know by clicking United States Department of Justice Antitrust Division.”
And “If you are making a listing presentation and a homeowner asks if you will list on Zillow, let them know that Zillow makes it harder to sell a home by diverting the potential buyers away from you, the listing agent, who knows the home the best and is the most motivated to sell that home…. We never take a commission split or sell leads to competing agents. Instead, we earn revenue by promoting your listing to thousands of additional buyers across the internet.“
Rest assured, if Zillow does block your listing, it will still be seen on Homes.com and the other sites.
Opinion from thought leader extraordinaire and friend Brian Boero of 1000Watt:
The CCP should stand, and be fought for — “…this is about what kind of industry we want to be, and what kind of housing market we want to create: open or closed.
If the Justice Department thinks the MLS is fundamentally anti-competitive and anti-consumer, they should meditate on what it means when housing is labeled “Private Exclusive.”They should look hard at Europe, as they did when comparing commission rates to those found in the United States, to understand what happens to consumers when listings (otherwise known as “homes”) are closely held.
Victor Lund Wav Group — Beyond the basics of location, size, and price, comprehensive MLS data includes information on a property’s history that informs market conditions (average days on the market, price trends, or buyer demand).
Comprehensive data also allows for better comparative market analysis (CMA), used by real estate agents and appraisers to determine a property’s market value based on comparable sales. Without detailed information on comparable properties, CMAs can be inaccurate, leading to under- or over-valuations.
Ideally, the Mandatory Submission rule should remain undisturbed. The marketing part of this is inconsequential – but off-MLS listings that are not contributed to the MLS would erode comprehensiveness and lead real estate into the barbaric environment of most of the world.
Conclusion
Four excellent articles by one of my favorite authors, Summer Goralik, who sheds a lot of light on the current real estate landscape from the perspective of a regulator compliance investigator:
This first one is a terrific read: “Who’s behind door No. 3? ”
https://www.expertdrecompliance.com/post/plns-dual-agency-and-buyer-choice-back-to-the-future
https://www.expertdrecompliance.com/post/the-ccp-illusion-nar-s-jedi-mind-trick-on-a-failing-policy
Let’s hear YOUR opinion.
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4 Responses
Be sure to read Summer Goralik articles in the Conclusion. Lovely command of the written word — makes me envious she writes so well!
Thank you so much, John! You are too kind. If I only had your legal brain….
Great article! “A world without the MLS is a Wild West Show… it’s like not having a Department of Motor Vehicles and buying a new car.” Appreciate the perspective.
On a separate note, thanks so much for including some of my own insights here and article links!
Always thoughtful insight and input here on this ever-evolving topical discussion. Thank you John and Saul!