In 2018, NAR’s MLS of Choice policy made something very clear: MLS participation should not be trapped inside outdated assumptions about geography. MLSs are free to compete and brokers can easily join MLSs anywhere in the country.
The policy revisions to MLS Policy Statements 7.42 and 7.43 were approved by NAR’s Board of Directors in November 2017 and became effective July 1, 2018. The intent was to give brokers and licensees more flexibility in where they subscribe to MLS services, especially in overlapping markets where brokerages were being forced to pay duplicate MLS fees for agents who may not have needed access to every system. Historically, if a broker had even a single agent in an MLS, every agent of that brokerage would also need to join.
NAR’s MLS of Choice guidance explained that affiliated licensees should have the choice to belong to one or more MLSs where their principal broker participates, with each licensee subscribing to at least one MLS where the principal broker participates.
That may sound like an administrative fee policy, but the implications are much bigger.
MLS of Choice acknowledged a truth that MLSs need to compete more aggressively today: brokerage operations do not always fit neatly into legacy MLS boundaries.
Brokers operate across markets today, and a handful are national. Agents hold licenses in multiple states. Consumers move, invest, retire, relocate, and buy second homes across the country. Technology platforms are not dependent on a local office, a local association boundary, or a local physical presence.
So why are so many MLSs still marketing themselves as if they are locked inside one local footprint when in fact, any broker from anywhere can join. Most, if not all MLSs have at least a few out of area listings on their platform.
MRED Did Not Suddenly Become National
Compass recently invited its agents to join MRED, even offering to pay for those subscriptions. That announcement created a lot of conversation across the MLS community, especially as listings from Texas, Florida, California, and other states began appearing in the MRED data feed. Brokers other than Compass from Indiana and other neighboring states have joined MRED too.
Many people viewed that as groundbreaking.
It was certainly bold. It was certainly visible. It was certainly a smart way for MRED to increase subscribers and create more value, but the underlying concept is not new.
The reason this was possible is simple: any MLS can accept listings from anywhere if its rules, data structure, and business model allow it.
MRED’s database has included listings from outside Illinois, including places like Indiana, Missouri, Hawaii, and Florida, for many years. How was that possible? Because MLSs, unlike REALTOR® associations, are not inherently limited to a designated association territory.
Associations are assigned geographic jurisdictions by NAR. MLSs are different. MLSs are data cooperatives, technology platforms, compliance systems, and business marketplaces. As long as the MLS rules allow it, the technology can accept listings from almost anywhere.
That is the part of the story many people missed. The real headline is not that Compass offered to pay for MRED subscriptions. The real headline is that every MLS has the ability to expand its potential subscriber base too, but every MLS also has to give out of town brokers a reason to subscribe.
The MLS Boundary Is a Marketing Decision, Not a Technology Limitation
There is a practical reason MLSs can operate beyond the scope of their local Association’s jurisdiction. Technology does not care where a listing is located.
A listing in Chicago, Naples, Scottsdale, Honolulu, Austin, or Cleveland is still a listing. It has an address, price, property type, listing broker, listing agent, status, photos, remarks, showing instructions, and compliance requirements. The rules and fields may vary but the technology exists today to enable it.
That is even more true today because RESO standards make it significantly easier for MLSs, brokerages, vendors, and technology platforms to understand and move listing data across markets. When data fields, definitions, property types, statuses, and transport standards are more consistent, the friction of sharing listings across MLS boundaries is reduced.
The industry has already built much of the infrastructure needed for MLSs to think bigger. The question is whether MLSs will use it to attract subscribers to their marketplace.
An MLS can add a municipality. It can add counties. It can add states. It can create an out-of-market designation. It can build compliance rules around non-local listings. It can require proper licensing, broker participation, data accuracy, and disclosure. It can decide how those listings appear in search, IDX, syndication, market statistics, and reporting.
In other words, the MLS can choose how national it wants to be. The limitation is not the system. The limitation is your market’s growth strategy.
National Brokerages Are Much More Prevalent. MLS Strategy Needs to Catch Up.
There are more national brokerages today than ever before. The brokerage landscape is no longer defined only by local independents and regional firms. Many of the largest brokerage organizations now operate across dozens of states, hundreds of offices, and thousands of agents. Chris Kelly of Berkshire Hathway Home Services recently shared that they need to collect their listings from hundreds of MLSs.at the Cotality summit, for example.
And some of these national brokerages are getting even larger through mergers, acquisitions, and consolidation. And some regional brokerages are becoming national.
Their footprints are expanding. Their agents are working across more markets. They are licensed in multiple states. Their listing exposure strategies are becoming more sophisticated. Their referral networks are becoming more valuable. Their technology expectations are rising.
So why are so many MLSs still marketing themselves as if they only serve one local footprint?
When an MLS serves a brokerage that operates in several states, it is common for brokers and agents to enter listings into multiple MLS systems. They do it because there are not data shares. They do it to increase exposure. They do it to support referral business. They do it because their agents work across markets. They do it because consumers do not organize their real estate decisions around MLS boundaries.
An agent licensed in Ohio and Florida, for example, may want to promote their listings in both systems. A brokerage with offices in Illinois, Texas, Florida, Arizona, and California may want its listings visible to agents in multiple high-value markets. A luxury, relocation, investment, or second-home specialist may see enormous value in reaching subscribers outside the immediate geography of the property.
Why would an MLS not want to support that?
For years, MLSs have talked about broker value, data value, customer engagement, and relevance. Here is a very practical way to deliver all four.
Help brokers market more of their inventory. Help agents find more referral opportunities. Help subscribers see listings in second home markets that matter to their clients. Help the MLS become a broader business platform, not just a local search utility.
The rise of national brokerages does not make MLSs less important. It makes the right MLS strategy more important than ever.
Every MLS Has a National Opportunity
The bottom line is simple: any MLS can include listings from around the country if it chooses to do so.
That does not mean every MLS should throw open the doors without rules, standards, or a strategy. This needs to be done thoughtfully. MLSs need to address licensing, broker participation, data integrity, public records alignment, market statistics, compliance, consumer display, IDX, syndication, and subscriber communication.
But those are manageable business and governance questions. They are not reasons to ignore the opportunity. The bigger risk is doing nothing while brokers and agents increasingly operate in a world that is broader than the MLS’s own self-definition.
If your MLS serves brokerages with multi-market operations, now is the time to ask a very direct question: Why aren’t we inviting them to enter all their listings into our system?
If your MLS has agents who specialize in relocation, investment, luxury, retirement, second homes, military moves, snowbird markets, or referral business, now is the time to ask another question: Why aren’t we helping them see more inventory from the places their clients care about?
And if your MLS has been describing itself as “local” simply because that is how it has always been described, now is the time to ask the most important question of all: Is that still the right story?
Every MLS Can Be National. You Just Haven’t Marketed It That Way Yet.
NAR’s MLS of Choice Policy updates in 2018 helped reinforce that MLS participation is about broker need, not old assumptions. MRED’s Compass opportunity simply put a spotlight on what has been possible all along. MRED’s rules became attractive. Bright MLS’s rules became attractive. CRMLS, Stellar, and many others have become more attractive. They all believe in MLS Only listing submission that allows showings, cooperation, and the freedom of the broker to market the listing for the seller without participating in IDX advertising programs that cost buyers and sellers.
Every MLS can be broader than its legacy footprint. Every MLS can create an out-of-market pathway. Every MLS can support multi-state brokerages. Every MLS can help agents generate exposure and referrals across markets. Every MLS can decide to become more valuable to brokers whose businesses are no longer confined to one city, one county, or one state.
But if every MLS recognizes that opportunity, MLSs may also have to start competing for business in new ways. That may sound uncomfortable. It may even sound threatening. But it can also be healthy.
Competition has a way of making organizations sharper. Companies that compete well are more proactive, more customer-centric, and more nimble. They develop a clear positioning. They understand their niche. They find unique ways to deliver relevant offerings to their customers. MLSs need to think the same way.
Even if your MLS does not believe it has overt competition today, it needs to respond as though it does. The real estate landscape is shifting quickly. Brokerage consolidation, national brands, multi-market agents, private listing strategies, data licensing, AI, consumer portals, and changing broker expectations are all putting pressure on old assumptions.
The next generation of MLS strategy cannot simply ask, “How do we protect what we have?” It also needs to ask, where can we grow? Which customers are we uniquely positioned to serve? What listing inventory should we invite into our marketplace? What broker problems can we solve better than anyone else? How do we strengthen our relevance before someone else defines it for us?
Maybe your MLS should expand its scope. Maybe it should expand the customer types it serves. Maybe it should become the most broker-centric or AI-enabled. Maybe it needs to join other MLSs and create a much larger regional footprint.
Or maybe your MLS should not try to be national at all, but should still understand exactly why, and build a stronger position around that choice. Some brokers have no interest in inviting competition into their marketplace. That’s okay too. Every market is different.
If your strategic planning process is NOT asking these types of fundamental questions, it’s time for a new approach. A strategic plan that includes scenario planning around national competition, brokerage consolidation, out-of-market listings, AI, data control, customer engagement, and new business models is not a luxury anymore. It is the only way to truly know your strategic plan is not just going through the motions and building a pretty poster with no meaningful action items and no measurable deliverables that thoughtfully outline what it’s going to take to make your MLS more valuable, and ideally indispensable, to your MLS customers.
If you would like your next strategic plan to help you identify the new approaches your MLS needs to adopt for your MLS to thrive, WAV Group would love to help. Please fill out the attached form and we can talk about how to position your MLS for long-term success.
