UNDER ALL IS THE DATA  |  PART 6 OF 8

Doors Do Not Check Motives

Paper brokers, “actively endeavoring,” and the half of this argument the decree already decided against the industry

By Saul Klein and John Reilly     August 2026

What do we do about the broker who is a broker on paper only? The entity that holds a license, signs the participation agreement, pays the standard fee, takes the full payload, and gives the cooperative almost nothing back? The firm whose real product is not representation but audience, whose real customer is not a buyer or seller but an advertiser or a lead purchaser? Just because a person or entity holds a broker license, are they entitled to receive an IDX or VOW payload on the same terms and at the same cost as a broker who actually lists, actually sells, and contributes inventory to the cooperative rather than harvesting leads from it?

The honest answer has two parts, and the first part is the one the industry least wants to hear.

What “Actively Endeavors” Requires

Start with the phrase that carries all the weight. Mere possession of a broker’s license has never been sufficient to qualify for MLS participation. The license is necessary, not sufficient. What is required beyond it is that the participant actively endeavors, during the operation of its real estate business, to cooperate: sharing information on listed property and making it available for showing when in the seller’s interest, or attempting to find buyers or tenants for properties listed in the service. “Actively” means on a continual and ongoing basis. That is the whole affirmative requirement, and it is not nothing. But it is also not what most people hope it is.

What the Note Forbids

The interpretive Note that travels with that definition, written into Exhibit B of the 2008 consent decree and carried into the NAR Handbook and local rules ever since, spends most of its length telling MLSs what the test cannot do. An MLS may not require a minimum number of transactions. It may not deny participation for part time, seasonal, or market interrupted operation. It may not deny participation based on the level of service a broker provides, so long as that level satisfies state law. It may not deny participation to a VOW operator, and the Note says this expressly, including a VOW the participant uses to refer customers to other participants. And an MLS may examine whether a participant actively endeavors only when it has a reasonable basis to believe the participant is in fact not doing so, applied without discrimination.

Remember why the referral language is in there. The Department of Justice put it there. NAR’s 2005 reinterpretation of the membership rule, which would have excluded brokers whose business was educating buyers online and referring them out for a fee, was one of the Challenged Policies in the government’s complaint. The government’s position, which the industry accepted at the point of a federal judgment, was that the referral model broker is a legitimate, efficient competitor. The industry’s contempt for that model was the anticompetitive impulse being remedied.

So the sentence “they just sell leads” is not a deficiency under the Note. It is, almost verbatim, the protected business model. Whatever we do about paper brokers, we cannot do it by deciding that lead generation is not real brokerage. We litigated that. We lost, or rather, we settled on terms that concede the point.

Same Feed, Same Price? Mostly, Yes

The pricing question falls the same way. The decree prohibited fees on VOW operators exceeding the MLS’s reasonably estimated actual costs, and prohibited discrimination in those fees. The surviving policy carries the identical principle for data feeds generally: charges reasonably related to actual costs incurred. An MLS may absolutely recover different costs where costs genuinely differ. Feed volume, infrastructure, support burden, license administration. What it may not do is price participation by contribution, imposing a surcharge on the broker who lists too little. That is level of service discrimination wearing a fee schedule, and the Note forecloses it.

This is why the portal era arrived the way it did. When a national portal stands up licensed brokerage entities in order to hold participation and take feeds directly, the architecture works exactly as the decree designed it to work: hold the license, agree to the rules, pay the same fees, cooperate at whatever level state law tolerates, and you are in. The door the government forced open for the innovative VOW broker of 2005 is the same door the well capitalized media company walks through in 2026. Doors do not check motives.

At this point in every hallway conversation, someone proposes the fix that feels obvious: draw the line with arithmetic. If at least half of an entity’s revenue comes from closed real estate transactions, it is a real broker; if not, it pays more or stays out. It is a tempting test, it feels objective, and it fails on three independent grounds. Part 7 takes it apart, and then builds the differentiator that actually survives scrutiny.

Next in the series: The Tempting Test, on revenue screens and the two track answer.