It’s a battle cry I hear often enough from the public in general and from FSBO’s and Expireds particularly. There seems to be this tremendous anger against the real estate industry and agents because we simply won’t “open up” the MLS for the public to use in the same way as real estate professionals do. But this issue must be taken in its proper context. The bigger problem lies with how the public perceives the real estate industry – and that is where we have a much more serious problem. The two issues overlap each and become intertwined kind of like the rats nest of wires hidden behind my computer!
Although I had been planning a post on the MLS the content of this blog was altered and influenced by three posts that if you haven’t read, you should.
Lenn Harley's post: Memo to Johnathon Washburn: Re: Redfin and the MLS.
John Washburn's post: NAR Mission: To be the gatekeepers of listings....
Jesse & Kathy Clifton's post: The Enemy Within.
The issue with the MLS, although a valid issue is also a symptom of a much bigger problem. If our profession was respected, many of the issues with respect to the MLS would disappear or at least not exist with the same poisonous intensity it does now. As the reputation sinks to new lows, the “open MLS” issue RESONATES with the public in a way that it wouldn’t if the public understood that working with a qualified professional brings true value to a real estate transaction.
I’ll address the MLS issue first:
Part of the problem with respect to the MLS has to do with a public misunderstanding as to what the MLS actually is. Many people think that when they link to IDX or Realtor.com, they are viewing the actual MLS that brokers and agents use. That is simply not true. They are looking at the public version of the MLS. First, there is no one MLS. There are hundreds of local MLS's operating throughout the U.S. The version of each local MLS that agents and brokers use is a proprietary database. Created by Realtors for Realtors, the MLS database remains proprietary because it IS private intellectual property.
The public hunger for more, more MORE “free” information has lead to a release of more information than may have been wise. This has fueled the urban legend that the MLS should be a public utility. One of the major aspects of the MLS that remains tightly under broker control irks a portion of the public to no end. That is the ability to list a property for sale or for rent. But, it is that very tight control that makes the MLS what it is: a reliable database of accurate information. This restriction, no matter how contentious, ensures the continued reliability of the database. Could you imagine allowing just anyone to list their home on the MLS? People would be slapping up listings right and left with numerous errors and omissions and without any of the constraints that govern Realtors. Talk about a mess – the information would be about as reliable as a Zillow “zestimate.” There are VALID reasons why listing a property is restricted to licensed individuals.
Another reason you can’t “open up” the MLS is that if you do, who will pay for it? Agents, brokers and appraisers support the multiple MLS’s with their dues. Access to each of the local MLS’s is a privilege , not a right. We PAY technicians, programmers and administrators to perform the complex task of maintaining and regulating a very complex and constantly changing database. Why would I – or anyone else – choose to pay for what everyone else can access and contribute to for free?
So to members of the public who think that feel they should have free, unfettered access to the hundreds of national MLS’s, I say “Get over it.” The MLS’s can not and will never be free and open and with good reason. The minute you “open it up” in this way, you destroy its value and much of the “free information” you now have access to will be gone.
The second issue has to do with our perceived value to the public: 
As pointed out by Jesse and Kathy, we have seen the enemy and he is us. There are three problems:
- There are plenty of stupid and incompetent agents running around destroying the reputations of the rest.
- There are plenty of dishonest, greedy agents running around destroying the reputations of the rest.
- There are plenty of stupid, incompetent, dishonest and greedy agents running around destroying the reputations of the rest.
How we got there is an interesting story and there is plenty of blame to spread around.
Here are a few highlights:
NAR got greedy: It wanted dues from more warm bodies more than it wanted to maintain high standards. So there was little incentive to raise the bar on licensing that would have kept out many of the incompetent “get rich quick” types. In spite of a mountain of evidence that there are large numbers of poorly trained agents running around, they remain mum on making it harder to obtain a license. The status-quo suits them just fine.
Agents got greedy: Established agents started demanding more and more in the way of splits from their brokers. It got to the point where quite a few top producers were getting such high splits, they were not earning their keep with their brokerages. The services they demanded, exceeded what they were bringing in in commissions.
Brokerages got greedy and hungry: As revenue fell from top-producers, brokerages had to find income from other sources. Many became puppy mills where they took in anyone with a license and a pulse. They didn’t train, they didn’t mentor, they didn’t share leads, but still felt free to collect fat splits for doing nothing for the agent while leaving them to sink or swim. The idea was that the fat splits they would get from the newbie agent would bring in revenue at almost no cost. Most agents can get a couple of sales from family and friends. So it was “easy money.” But it created an untrained, starving and desperate group of new agents who would do anything to get a sale. Apart from the moral aspect of taking advantage of agents in this way, this type of agent can do a lot of damage while they are handling a person’s single largest investment. It doesn’t take many people like this to create a lot of public bad will. For more on this, see my previous blog on this topic.
Desperate new agents were greedy and hungry: I will not elaborate on this, it was explained above.
Licensing education and continuing education (including designations) are a joke: Almost anyone can get a license. Almost anyone can get several designations. All you need is money and time. The formal education I have received is nothing short of pitiful. We need to get rid of the Mickey Mouse nature of education and designations so that agents actually EARN their licenses and designations and THEN and only THEN will they have some meaning in the eyes of the public. I have a Ph.D. in another field. I could easily fill up on designations but I don’t because the education behind them is useless. I can sit and listen to the stupidity or I can actually LEARN something on my own. That’s pitiful.
Those who hide behind the Realtor Code of Ethics are fooling themselves. There are serious problems that are intrinsic to the system that makes the COE nothing more than an empty promise. This has lead to the degeneration of our value in the eyes of the public. If the public perceives that we are lacking in educational and ethical standards and bring nothing more to the table than submission to a tightly controlled database, then it is understandable that they feel that opening up the MLS will solve all their problems and put an additional 5-7% profit in their pockets.
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I totally agree with you that the MLS should not be open to the public and that getting a RE license might be too easy. On a side note I'm wondering why once we earn a designation we have to pay to keep it? Seems like another way to make money off us agents.