MLSs should negotiate data licensing together under an alliance

The open marketplace is the most valuable asset our industry owns, and at the moment, no single organization is responsible for protecting it.

That should sit uncomfortably with every broker-owner and association leader. We have a National Association of Realtors that reports more than 1.5 million members. We have RESO setting the data standards. We have 489 separate MLS systems doing the daily work of keeping listings accurate, current and visible to every buyer. What we do not have is one body whose only assignment is the health of the marketplace itself.

For decades that gap did not matter, because no one was strong enough to exploit it. That era is over. National portals and brokerages now negotiate, litigate and advertise from positions of real national scale, while the MLSs that actually run the marketplace meet them one market at a time. A national portal can sit across the table from the country’s 489 MLS systems and work them individually. No single MLS, and certainly no small one, holds enough leverage by itself to keep a national standard from buckling under that kind of pressure.

The answer is not another layer of bureaucracy. It is an alliance — a voluntary body of MLSs organized around five specific jobs.

1. Set the national rulebook floor. The alliance adopts minimum marketplace standards that every member agrees to follow. Every listing registered and visible to all MLS participants. A uniform written seller disclosure before any private or delayed marketing phase. Consistent definitions for Coming Soon and office exclusive status. Uniform timelines.
   
   No member may drop below the floor and every member may add stricter rules above it. This is the architecture of building codes: a national minimum, with room for local additions. A county can always require more than the code requires. It can never quietly require less.
   
2. Negotiate data licensing as one body. Today a national portal can negotiate hundreds of separate data agreements and let MLSs compete against one another on terms. Under an alliance, members adopt a common licensing framework with standard terms, standard pricing principles and standard enforcement.
   
   A portal that wants alliance listings negotiates that framework once, with a body that speaks for the more than 1.5 million members NAR reports plus the many subscribers who carry no NAR affiliation, rather than picking off MLSs one by one. The alliance owns no one’s data. Each MLS still licenses its own. The alliance simply hands every member the same set of terms to stand behind.
   
3. Defend members with a shared legal fund. Members contribute to a pooled legal defense and policy fund, so that when a national player sues, pressures or threatens one MLS, it meets the resources of all of them. The fund changes behavior before a single complaint is filed. The recent disputes over private-listing and listing-access policies, now the subject of ongoing federal litigation, show how expensive it is for one MLS to stand alone against a national balance sheet. Shared defense takes that imbalance off the table.
   
4. Build shared standards and shared technology. Working from RESO’s existing data standards, the alliance can fund the tools every member needs and few can build alone: cross-market listing search, fraud detection, compliance systems and clean consumer-facing data feeds. The smallest MLS in the country gains capabilities that today belong only to the giants. Pooled infrastructure is how a hundred modest players can buy what one large player builds for itself.
   
5. Tell the consumer story with one national voice. Right now, the private-listing pitch reaches consumers through companies with national advertising budgets, while the case for the open market is made piecemeal, market by market, if it is made at all. The alliance funds a sustained national campaign built on one plain message: the open market is how your home reaches every buyer, and every buyer reaches every home. Sellers deserve to hear both sides before they sign.

It is worth being precise about what this alliance is not, because the objections write themselves otherwise.

It is not a national MLS. There is no central database and no merger of systems, and listing data stays with the local MLS that collected it. It is not a replacement for NAR. NAR is the association of brokers and agents; the alliance is an organization of MLSs, including the many that operate outside NAR affiliation. The two can and should work together, but the marketplace needs a body whose sole charge is the marketplace. It is not anti-brokerage or anti-portal, either. Brokerages and portals are essential to this business, and a marketplace that stays open, complete and fair serves every honest participant, including them. And it is not mandatory. Membership is voluntary and open to any MLS that adopts the floor.

That voluntary structure is the piece skeptics tend to underestimate. Visa did not conscript its member banks. The Associated Press did not draft its member newspapers. Both became indispensable because standing together plainly beat standing alone, until joining was the obvious choice rather than the forced one. An MLS alliance can grow exactly that way, on the strength of its benefits: the legal fund, the licensing framework, the shared technology, and the single national voice.

The real estate professionals we coach do not need their leaders to win every argument with a portal or a brokerage. They need leaders who make sure the field those arguments are played on stays level. The marketplace has never protected itself, and it will not start now. The only open question is whether the people who depend on it will organize to protect it first.

Darryl Davis, CSP, is a speaker, coach, and bestselling author who has trained real estate professionals, and the leaders who build them, for more than 40 years. He is the founder of the POWER AGENT® Coaching Program and Darryl Davis Seminars. Learn more at darrylspeaks.com.

This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.

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