Cmls Warns Pre Marketing Could Fragment The Housing Market

The Council of MLS (CMLS), the trade organization for multiple listing services, is pushing back against the rhetoric currently circulating the housing industry that “sellers benefit when their listings are not broadly exposed, that listing brokerages have a fiduciary duty to withhold facts from other brokers and their buyers, and that MLSs work against real estate professionals.” 

In a blog post published on Wednesday, CMLS calls these ideas a “false narrative,” and pushes back against the increasing popularity of pre-marketing strategies and platforms. The trade organization is warning the housing industry that limiting listing exposure could fragment the housing market and tilt competition in favor of larger firms.

“The MLS keeps the housing market open, transparent and competitive. It serves both sides of the transaction. Buyers get a complete and reliable view of available homes. Sellers benefit from a market in which brokers compete in the open. Brokerages of all shapes and sizes, and their clients, get a fair opportunity to compete in a shared cooperative system with access to the same market information,” the blog post states. 

Additionally, CMLS also warned the industry that blocking data points like days on market or price drop history from display reduces transparency for buyers and makes it harder for sellers to price their homes, while also making it more challenging for smaller brokerages to compete on an equal playing field. 

“Complete, timely, and accurate listing information matters. Buyers and sellers rely on price history, days on market, and status changes to make informed decisions in one of the most important financial transactions of their lives,” the post states. “When a brokerage calls those facts ‘negative insights,’ it denies brokers and consumers access to market facts. If those facts were not important to consumers, we would not have this debate.”

Days on market and price changes vital for transparency

The post also notes that the Department of Justice (DOJ), in previous litigation with the National Association of Realtors (NAR), highlighted days on market and price changes as important information MLSs must provide brokerages and consumers. 

“The information the brokerages want hidden would not disappear. It would remain available to the largest firms. A brokerage that places a listing into “coming soon” status while asking the MLS not to track days on market or price changes still has that information,” the post states. “So do other large firms with the technology to track it. The result is that key information would remain available to a few large brokerages and the buyers they represent, but not to newer and smaller competitors and their clients.”

Small brokerages are hurt the most

Due to this, CMLS argues that without access to information like this, smaller or newer entrants into the industry would struggle to compete with larger firms, hindering competition in the space. 

“Siloing and hiding information weaken competition between brokerages and moves the market away from an open, shared system toward a more fragmented one,” the post states. “If this direction persists, brokers and consumers will be required to constantly search countless venues to find available homes, and they will never be confident that they have a complete view of the marketplace.”

While the post does not specifically call out any individual companies or organizations, it comes as listing portal firms and brokerages across the country announce partnerships to display coming soon listings. 

This trend began roughly a year ago when Compass began touting its three-phased marketing system, which first sees a listing debut as a private exclusive listing within Compass’s internal listing platform before phasing into a coming soon and eventually an active listing on the MLS.

Compass took things a step further in late February of this year, announcing a mutually exclusive partnership with Rocket Companies and Redfin to display Compass’s coming soon listings on Redfin.

Then, earlier this month, Zillow announced exclusive partnerships with HomeServices of America, Keller Williams, Side, United Real Estate and REMAX to pre-market their coming soon listings with Zillow Preview. Earlier this week, Zillow announced that 24 additional real estate firms had signed on to the program, which is expected to debut next month.

Homes.com, Realtor.com and ComeHome.com have also entered the pre-marketing game in the past weeks, each announcing a non-exclusive deal to display eXp Realty’s coming soon listings. 

With these announcements industry experts have hypothesized that this could mark the end of the MLS as we currently know it. 

​​“The MLS is not going to fall over tomorrow, but the era of the MLS being the dominant marketplace for the sale of homes is coming to a close,” Steve Murray, the co-founder of RealTrends Consulting, told HousingWire last week. “I don’t know how long it will take, but it is coming.”

While some firms seem adamant about “dismantling” MLS systems that do not support their demands, others continue to see value in the transparent market created by the MLS and they are calling on MLSs to adapt to the current needs and desires of brokers and consumers. Given this environment, only time will tell if the MLS will go the way of the dodo.