The
rational
case
for
repealing
MLS
Clear
Cooperation
rules.

Does
cc
work?
Do
I
benefit
from
it?
Would
I
like
it
to
stay
in
place?

Yes. 

Is
it
best
for
consumers,
(who
anti-trust
laws
are
designed
to
protect?) 

It
depends.

Are
we
comparing
it
to
Compass’
gamesmanship
ushering
in
a
worst-case
scenario
where
buyers
need
to
go
through
20
brokerage
websites
to
see
all
that’s
available?

Or
are
we
comparing
it
to
a
mature
free
market
where
actual
competition
compels
the
existing
infrastructure
to
improve
by
simply
opening
the
door
to
competition
that
could
disintermediate
it?

MLS
system
offers
transparency,
but
at
what
cost?

MLS
is
not
capitalism
in
its
final
form.
In
fact,
if
the
industry
started
over
from
scratch
today,
there
is
almost
no
chance
we’d
end
up
with
400+
MLSs
each
with
their
own
management
team,
data
structures
and
rules. 

Every
year
I
get
a
postcard
on
my
birthday
from
my
MLS,
My
MLS
pays
for
technology
that
I’ll
never
use
and
they
put
on
training
I
rarely
attend.
Since
I
started
writing
this
article,
I’ve
also
discovered
that
my
dues
paid
for
dog
watching
services
while
‘volunteers’
scored
thousand
dollar
Hamilton
tickets.
To
me
and
most
agents
I
know,
the
value
of
the
MLS
is
in
the
database
and
few
want
to
subsidize
the
programs
that
we
don’t
benefit
from
and
neither
do
consumers. 

Cost
absorbed
by
consumers
can
be
measured
in
$
Billions
to
keep
the
current
structure
in
place. The
math
is
simple,
I
pay
$1,200
a
year
in
associations
and
MLS
dues
and
there
are
1.5M
agents
who
like
me
are
also
required
to
pass
along
this
cost
to
consumers.  

Due
to
CC,
practitioners
are
required
to
give
their
valuable
data
to
brokers
and
marketing
intermediaries
alike.
Companies
like
Zillow,
Reatlor.com
and
lead
gen
companies
of
all
shapes
and
sizes
use
this
data
to
add
billions
in
costs
to
consumers. 
If
these
companies
had
to
source
their
own
data
to
draw
in
customers,
their
businesses
would
look
quite
different
than
they
do
today
and
this
would
likely
benefit
consumers
more
than
being
sold
to

agents
with
a
40%
markup. I
recently
wrote
at
article
‘Golden
Goose
of
real
estate’
that
explains
real
estate’s
Referral
fee
problem
that
exists
primarily
because
of
CC.

As

private
equity
makes
their
way
into
owning
our
industry’s
infrastructure,
do
we
really
want
to
protect
MLSs
as
if
they
are
a
unregulated
utility
that
is
so
beneficial
to
transparency
that
it
must
be
preserved
at
all
costs? 

MLS
benefits

I
almost
unanimously
agree
with
all
of
the
benefits
touted
by
supporters
of
CC,
which
makes
this
quite
a
dilemma
between
choosing
capitalism
over
the
safety
and
familiarity
of
the
current
system. Today,
buyers
see
all
inventory
and
a
brokers’
job
is
easier
without
having
to
personally
source
it
themselves.
Transparency
and
access
are
the
cornerstones
of
capitalism
and
free
markets.
No
one
can
argue
against
these
ideals,
but
saying
that
they
wouldn’t
exist
without
transparency
afforded
by
CC
is
simply
a
deep
mistrust
of
capitalism.
It’s
almost
as
fearful
as
saying
first-time
homebuyers,
minorities
and

VA
borrowers
could
never
afford
to
buy
a
home
if
cooperating
compensation
was
removed
from
the
MLS.
It’s
only
been
three
months
and
most
of
those
fears
have
been
proven
to
be
unfounded.

What
happens
if
CC
is
repealed?

Sellers
will
still
want
to
feel
like
their
property
is
being
marketed
to
the
widest
group
of
buyers.
The
company
that
can
deliver
the
best
execution,
which
usually
comes
from
the
most
exposure
to
buyers,
will
win.
Robert
Refkin
won’t
be
able
to
convince
sellers
to
limit
their
exposure
and
marketing
so
that
Compass
can
lure
in
more
customers
for
themselves. Even
if
he
was
that
charming,
I’m
sure
the
industry
at
large
would
consider
whether
they
wanted
to
share
listings
with
Compass
–
would
buyers
want
to
go
to
Compass
if
they
miss
out
on
inventory
from
EVERY
OTHER
broker? A
truly
free
market
will
sort
through
all
kinds
of
ideas
and
iterations
to
arrive
at
something
that
gives
consumers
what
they
want,
best
execution.

Agents
shouldn’t
be
forced
to
choose
between
working
within
the
MLS
or
outside
of
it
and
buyers
and
sellers
shouldn’t
be
required
to
subsidize
the
MLS
if
they
don’t
end
up
using
it.
Any
efficient
marketplace
must
allow
participation
without
prohibiting
alternative
execution
methods,
otherwise,
it’s
anti-competitive.
There
is
no
incentive
for
the
current
system
to
improve
and
new
ideas
will
never
have
a
chance
if
brokers
are
excommunicated
if
they
want
to
offer
their
customers
alternative
methods
of
execution.

Existing
marketplaces
offer
a
blueprint

The
NASDAQ
offers
a
strong
example
of
how
a
marketplace
can
work
for
both
brokers
and
consumers.
For
decades,
NASDAQ
has
supported
efficient,
competitive
trade
by
allowing
brokers
to
manage
their
own
electronic
communication
networks
(ECNs).
NASDAQ
was
born
out
of
inefficiency
in
other
markets
like
NYSE,
replacing
hand
signals
in
a
crowd
of
humanity
for
instant
execution
electronically. What
if
NYSE
decided
that
brokers
placing
trades
over
their
network
could
not
place
trades
on
the
NASDAQ
or
they
would
lose
their
NYSE
membership? 
Would
NASDAQ
have
been
able
to
overcome
a
cold-start
problem
to
gain
enough
critical
mass
to
become
successful? 

Brokerages
like
Morgan
Stanley
or
Merrill
Lynch
have
their
own
ECNs
to
process
customer
trades
internally,
often
resulting
in
lower
costs
for
clients
and
higher
margins
for
the
brokerage.
When
a
broker
has
no
immediate
match
for
a
trade,
it’s
added
to
NASDAQ,
exposing
it
to
other
company
ECNs
that
might.
Imagine
if
real
estate
operated
similarly:
Compass
or
any
major
brokerage
could
offer
clients
exclusive
in-house
listings
with
an
option
to
list
on
MLS
or
an
equivalent
if
the
property
doesn’t
move.
The
benefits?
Sellers
receive
lower
costs
and
privacy
options,
while
buyers
still
gain
access
to
inventory. 

Repealing
Clear
Cooperation
would
not
eliminate
transparency
or
destroy
the
real
estate
market;
it
would
create
new
transparency
standards
driven
by
competition.
Sellers
want
visibility,
buyers
want
inventory
access,
and
brokers
want
options
to
serve
clients
cost-effectively.
A
competitive
market
would
still
show
nearly
all
listings,
simply
because
sellers
and
brokers
want
it.
And
in
real
estate,
where
information
is
highly
localized
and
diverse,
competition
ensures
that
service,
quality,
and
cost
are
balanced.

In
this
model,
agents
would
thrive
without
being
forced
to
subsidize
an
outdated
MLS
structure,
and
consumers
would
enjoy
the
benefits
of
true
market
choice.
Capitalism
thrives
on
competition,
and
when
Clear
Cooperation
is
struck
down
for
stifling
free
market
trade,
the
infrastructure
will
transform
and
that’s
probably
a
good
thing.
Capitalism
will
do
its
job
and
form
a
more
efficient
marketplace
resulting
in
more
options
for
consumers
and
more
opportunity
for
innovative
agents,
even
agents
who
don’t
hang
their
license
at
Compass. 

Dean
DiCarlo
is
the
CEO
of
Homing.

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

To
contact
the
editor
responsible
for
this
piece:



[email protected].

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