MLS cooperation is a consumer-friendly way for real estate professionals to conduct business. The big guys can still dominate with most of the listings, but the little guys can use the MLS to do business, too.

However, a disturbing trend may change all that. Many brokers, sick of the loss of control they have over their content are challenging their MLSs by asking them to shut down public-access MLS Websites.

In Chicago, big brokers have pressured MLSNI shareholder associations into closing down its public-access listing site, wwwchicagometrorealestate.com.In addition, seven additional "broker representatives" were allowed to join the MLSNI board, giving brokers a majority over the 10 shareholder association executives, among other concessions.

The Cincinnati Area Board of Realtors, has voted to suspend CincyMLS.com, according to Cincinnati news reports, which say that the Northern Kentucky Association of Realtors is considering a similar action. Local brokers in Houston are trying to curb the power of the Houston Associations of Realtors MLS and may force concessions from the pro-consumer board and MLS.

There may be dozens more across the country considering similar actions.

After years of trying to facilitate broker reciprocity through exposure of listings to the public, the same MLSs and associations that bowed to broker demand are now listening to a countermovement to end MLS public-access Web sites.

Two sides to the issue

As big brokers have told Realty Times and The Cincinnati Enquirer, they feel they are being taxed twice for supplying listings to the MLS. They feel the MLS sites compete with their sites to be found by consumers, and they feel they have to spend thousands more to be found when the smaller brokers don't spend as much because they can be found for free on the MLS sites by consumers.

But smaller brokers feel that cooperation is the one marketing asset all participating brokers can have. As association/MLS members, each member can offer a marketing advantage to clients that shuts out competition from other licensees. They feel the MLS and its services are for all brokers, and that associations and MLS shouldn't bow to pressure from a few big broker members. The associations, they feel, are made up of all brokers who can vote as a majority to implement rules, regulations, and to provide public listings sites to provide free exposure for all.

Secondary concerns are that providing listing sites to the public costs associations more money, and puts them and their MLS subsidiaries/partners into businesses they either don't want to be in or are ill-equipped to be in. One issue that comes up frequently is listings being "skimmed" from public sites that are posted illegally on lead referral sites that charge back referral fees to the listing broker or buyer's brokers who are looking for business.

This was at the root of one of the largest scandals of 2003, resulting in an injured LendingTree winding up with key assets of Primedia for involving their good name in a listing scam.

Meanwhile, consumers are alarmed and confused as brokers in Chicagoland are finding out during listing appointments where they find themselves having to defend the actions of their leaders instead of listing houses.

One consumer wrote to Realty Times, "Why deny the public access to the MLS if they are willing to pay for the service. What has been the results of law suits by consumers to allow access to the MLS? This would be a great law suit for a law firm to undertake on behalf of consumer groups. Very beneficial to the public."

Consumers don't understand that MLSs are privately owned repositories of inventory, like any warehouse where vendors are given access, especially once MLSs have gone "public" with listings.

They don't understand the cooperative nature of MLSs, especially when brokers don't want to cooperate with each other, but one thing they can understand is that something is being taken away and somebody's to blame.

Published: August 20, 2004

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