PRESIDENT'S CORNER: The MLS Increases Competition, Levels Playing Field for Consumer

Many Realtors today are worried about a string of anti-trust lawsuits filed against NAR alleging anticompetitive practices. While NAR is vigorously challenging those lawsuits, one of which was recently dismissed, the average Realtor needs to focus on the value benefits that Realtors bring to each transaction.

Contrary to the allegations in those lawsuits, participation in local MLS broker marketplaces increases competition by leveling the playing field for small real estate firms and new market entrants, allowing firms of all sizes to compete. This gives consumers greater choice and far more freedom to choose whom they wish to work with, what levels of service they prefer, and which pricing model suits their needs.

Realtors work together for the benefit of consumers to promote equity, transparency and market-driven pricing options for consumers. It is unquestioned that local MLS broker marketplaces provide consumers with the largest database of available homes for sale, ensure the most accurate property info and listing status information, and facilitate cooperation between buyer and selling brokers.

Every sales listing gets maximum exposure giving sellers access to more buyers, and buyers’ access to the most choices. Reliable property information mitigates against the possibility for misrepresentation and confusion, allowing buyers and sellers to negotiate on a level playing field.

Every buyer and seller who works with a Realtor works with a licensed and trained real estate professional who operates under a strict Code of Ethics that compels Realtors to protect and promote the interests of their clients. Our Code of Ethics promotes professionalism and demands that Realtors owe their clients the fiduciary duties of obedience, loyalty, disclosure, confidentiality, accountability and reasonable care/diligence. Fairness, honesty, and transparency are the pillars of our Code of Ethics.

Recently, I had the privilege of addressing nearly 1,000 real estate professionals at a real estate convention in Lisbon, Portugal. I spoke to them about our Code of Ethics and the fiduciary obligations of Realtors to their clients. I was astonished at their interest in this subject and the amount of attention it received. Those real estate professionals, unlike many in the United States who take our Code of Ethics for granted, understood that a free, fair, transparent, and competitive marketplace can only exist when there are rules that bind Realtors to an ethical relationship of trust with their clients and with consumers.

If any of the current lawsuits against NAR succeed, consumers would be the most detrimentally impacted with the result that homebuyers would be discouraged from obtaining professional representation in one of the most complex and consequential transactions of their lives. Of those consumers, first-time and low- and middle-income homebuyers—often with the least experience and the least information—would suffer the greatest hardship.

While most consumers today begin their research online, almost nine in 10 people still choose to work with a real estate agent, according to the NAR 2020 and 2021 Profile of Home Buyers and Sellers Report. That is because in a free and competitive marketplace, knowledge is power, and most consumers rely on the knowledge and expertise of Realtors. An understanding of property taxes, property valuations, financing options, market trends, and competitive pricing strategies empowers both buyers and sellers.

Realtors are experts who assist their clients with a myriad of complex federal and state disclosures, forms and closing documents. Realtors efficiently navigate their clients through a complicated transaction requiring coordination between inspectors, appraisers, attorneys and lenders.

For those Realtors with experience in global real estate transactions, it is common knowledge that local broker marketplaces in the US are the best option for consumers around the world. More than 100 real estate associations in 75 countries have bilateral relationships with NAR, many of which (on nearly every continent) seek our advice and expertise in developing and promoting similar local MLS broker marketplaces. With consolidated fees and a streamlined process, international real estate professionals recognize that this model provides the most efficiency, the greatest transparency, and the most market-driven pricing, benefiting both buyers and sellers.

I will continue to encourage our Realtor members not to fret about the current lawsuits. Rather, stay informed, stay engaged, and continue to do what Realtors always do: 1) advertise your services accurately and truthfully, 2) fully disclose your compensation and remind consumers that commissions and fees are always negotiable, 3) never represent your brokerage services as free, 4) demonstrate the value of your services to your clients and customers, and 5) faithfully abide the fiduciary duties you owe to your clients—obedience, loyalty, disclosure, confidentiality, accountability and reasonable care/diligence.

As long as Realtors continue to demand and promote a common responsibility for the integrity and honor of our standards of conduct, we can rest assured that a free and competitive marketplace will always exist for the benefit of every consumer.