Why Real Estate Brokers Want National Mls Access And Why A Federation May Be The Answer

The call for increased MLS consolidation is nothing new for the housing industry. But recent calls for the MLSs to combine into a single nationwide MLS have resurfaced sparking the question: “Is this even possible?”

“Not to cast shade on anybody who thinks it is a good idea, but I think it’s a dumb idea not because having a national MLS couldn’t be a good thing, but often times people who make the statement don’t really know and understand what MLS is,” Saul Klein, an MLS and real estate industry veteran and the CEO of San Diego MLS (SDMLS), said. 

As Klein sees it, no matter if you view a national MLS as a piece of software everyone puts information in, a singular database everyone can tap into or a single organization to govern real estate listings, each version comes with its own hurdles and concerns, which he says may not be adequately appreciated by those who think this would be a simple undertaking. 

All real estate is local

One of the most well known real estate axioms is “all real estate is local” and on the MLS level this is often reflected in different information fields or labels for listing data. 

“Technology has come a long way since Bright MLS consolidated nine MLSs, but it is still a lot of data that is similar but not the same — some have a period at the end of the abbreviation for street and others don’t — and AI can take care of that, but someone still has to go through and verify that all of these different fields and aspects of the data are correct and fit with everything else,” Brian Donnellan, the president and CEO of Bright MLS, said. “So, clearly it isn’t easy and that is just the data side of things. You also have politics, money and governance.”

Klein agrees that you can work through some of these technological challenges with the right tools and enough capital and manpower, but like Donnellan he also sees a whole host of other roadblocks. 

How do you govern a national MLS?

“How do you govern it?” Klein asked. “The National Association of Realtors (NAR) is moving away from MLS governance and enforcement, so who then enforces the rules? And if it is all under one roof, you are putting yourself in a position to become a target for antitrust litigation.” 

While Chad Jacobson, the CEO of Prime MLS, which primarily serves real estate professionals in New Hampshire and Vermont, understands the challenges some industry professionals face in having to join multiple MLSs in order to work in the communities they serve, he is doubtful that a national organization would be able to adequately respond and react to local needs the way a local or even regional MLS currently can. 

“The compliance side of what the MLS does now, that is a sticky wicket from both a licensing and a listing data perspective, and I find it hard to fathom a national organization being able to perform at the same level that a regional or local MLS can,” Jacobson said. “I can’t imagine a national organization being experts at all of the licensing and other rules associated with real estate on a local level. We operate in two main states and that is challenging enough. I can’t imagine what it would take from a resources perspective to do that for 50 states and I don’t know if the quality of that work would be that high.” 

MLS consolidation will continue

Despite all of these challenges, Donnellan says that there does need to be at an increase in MLS consolidation if the MLSs want to be successful in the future. This comes in part from his belief that while all real estate may be local, the infrastructure that supports these local professionals doesn’t have to be quite as local. 

“You need local expertise, but the data is the data, and if you are running good data it shouldn’t matter if you have a lot of insight into that marketplace,” Donnellan said. “What matters is that you are giving that insight and intelligence to the brokers and agents who are in that place working. You are seeing that now with a lot of the brokerage consolidation. Real estate is still local and you need that local knowledge but the technology and support infrastructure doesn’t matter like it used to.”

A federation of MLSs is the answer

This is why Klein believes a federation of MLSs providing all subscribed real estate professionals with national access to listing data is the best option.

“If you want to accomplish national access then there are better ways of doing it than creating a national MLS,” Klein said. “With this concept of a federation, you leave choices to the local marketplaces because they are all different and real estate is local, but then everyone still has access.” 

Donnellan agrees that 100% national MLS is most likely not the best option for the industry. 

“A national MLS never makes sense to me because when you only have one, the lack of competition [may] end up leading to poor service,” he said. “So, I think several high performing MLSs is the place we should be aiming for.”

Despite this, Donnellan acknowledged that the current conversation around the desire for a national MLS is different from prior iterations of the same conversation. 

“What I see differently today than in the past is the level of brokerage consolidation and technology available. I think the appetite from the broker for us to do something about it is probably higher than it has ever been before. Given the technology, I think what we are seeing is there probably has never been a better time to try to do this,” Donnellan said. “So, even though people are still saying the same things, I think it is different this time.”