Whether or not the lawsuits succeed, traditional brokers and the MLSes they depend on are facing challenges from all sides.
One is a crop of startups offering private listings, off the MLS, to high-net-worth clients who might pay a premium to avoid a bidding war. That allows the property to sell more quickly, even if agents take a higher cut. Then there are a group of companies known as iBuyers, like OpenDoor, which will buy homes sight unseen and hold them only as long as it takes to sell them again, which allows sellers to skip the MLS and attendant commissions altogether.
Billions of dollars of investor capital have been flowing into these startups, allowing them to gain market share without necessarily turning a profit. Some of the more established online listing portals, like Zillow, have launched their own iBuyer platforms as well. Keller Williams, the nation’s largest brokerage franchise, just got into the iBuyer game, too.
Even companies that have tried to make the real estate industry more competitive worry that will end up fragmenting the MLS, undermining a system that — while flawed in some ways — at least allowed all listings to be broadly available. Glenn Kelman, the CEO of Redfin, describes himself as “completely unreconstructed in my ambition to make real estate better for consumers.” But he fears that if real estate agents aren’t incentivized to contribute to the MLS, the whole network could break down.
After all, the National Association of Realtors’ firm rules have created an economic contract — the prospect of earning commissions — that gives market participants a reason to collaborate and create an information commons. If that financial motivation goes away, the real estate market may turn into a collection of well-capitalized tech fiefdoms that hoard information, allowing few consumers to access all of it.
“What I feel almost protective about, in this really sad elegiac way, is the MLS,” Kelman said. “Scientists believe that the dinosaurs were living a very marginal existence when the asteroid hit. I think the ecosystem in real estate is already just extremely vulnerable.”