The real estate industry fed Zillow until it became too powerful to ignore, writes coach Darryl Davis. Don’t do the same thing with MRED.
In Part 1 of this series, we explained:
What’s really going on with Midwest Real Estate Data’s (MRED) decision to open MLS membership to all licensed agents in the country? Why Compass is subsidizing 100,000 agents to join? Does MRED’s governance structure allow the brokerage with the most members to have the most control over the rules?
If you haven’t read it yet, please give it a read.
But I’m not just someone who points out problems. I’d like to talk about what MRED actually got right. Because that model contains something of real value. Next, I’d like to share three strategies agents and local MLSs can use to protect their systems before it’s too late.
Here’s what MRED actually determined correctly
First of all, I want to be fair about something. The concept behind MRED’s private listing network has one element that makes it better than true private listings.
This is a simple concept.
Sellers who prefer privacy or showing restrictions can register their listings on the MLS. Listing data will be recorded. Other agents in the system can see that it exists. Comparable sales data remains intact for market analysis.
The seller simply instructed them to limit the showings for as long as they wished. However, the door is not locked.
If the buyer’s agent looks at the listing and has a client who is a strong match, that agent can call the listing agent and ask to co-broker. And they’re very likely to approve, because listing agents have a fiduciary duty to present opportunities that are in the seller’s best interest.
That’s meaningful. List data will be saved. The market always provides information. Comparative sales remain accurate. And qualified buyers won’t be shut out just because they’re dealing with the “wrong” company.
The problem is not the concept. The problem is using that concept as the basis for a national MLS managed by a single brokerage firm. If this model is a good one, and I believe it too, then the answer is for every local MLS to adopt it. Don’t leave it to a single organization that can be controlled by one company.
Three strategies to protect your MLS system
Strategy 1: Don’t participate. don’t feed the beast
This is the simplest and most powerful means available to individual agents. MRED becomes a national MLS only when the agent authorizes it to do so. If agents outside the Chicago market do not sign up, MRED will remain a regional MLS with a national feed only on Compass. It’s not National MLS. It’s Compass’ soliloquy.
We’ve seen this movie before. In Zillow’s early days, many voices in the industry warned that the agency was essentially funding a competing company. The advice was simple. Stop feeding the beasts.
But agents continued to participate, continued to pay, and continued to provide listings and advertising dollars to Zillow. And what happened? Zillow has grown to become one of the most powerful forces in the real estate industry, now serving as the de facto governing body that influences how agents run their businesses. The agents created that monster with their own funds and their own participation.
Once agents nationwide sign up, MRED will become the next Zillow. The membership fee, every registered listing, every agent who joins from outside of Chicago gives MRED more authority, more data, and more legitimacy as a national alternative. The easiest way to prevent the formation of a domestic MLS is to cut off participation in MLS. Don’t make the same mistake twice.
Strategy 2: Recognize the model and adopt it locally
The concept at work here, which allows listings to remain visible within the MLS and allow sellers to specify viewing limits directly, is something that all local MLSs can offer. If your MLS allows sellers to say, “I want my listings in the system, but only visible to agents,” you’re already giving sellers the privacy and control they’re looking for.
I did it without removing the listing from the market data. And we did it within a system managed by local brokers who understand your market.
Strategy 3: Make MRED redundant
If all local MLSs adopt seller-driven display restrictions within their existing rules, MRED’s unique value proposition will disappear. Why would a Dallas agent pay to join Chicago’s MLS when his local MLS already allows the same thing?
No need to fight MRED. We don’t need a coalition. We don’t need a National Association of Realtors policy fight. All you need to do is provide the same flexibility locally while maintaining local governance and local accountability. It deprives the room of oxygen.
What Nationwide MRED Really Means
Nationalization of MRED is presented as an innovation and an option. In reality, this is the creation of a parallel MLS system, where one brokerage firm has tremendous influence over the rules, governance, and policies that affect every agent and every consumer in the market.
We don’t need a national MLS. We need a local MLS that listens to agents, provides a reasonable amount of flexibility to sellers who need it, and maintains guardrails that prevent a single company from controlling the entire system.
Fortunately, the solution is not complicated. Agents can also choose not to participate. Local MLSs can adopt parts of the model that work. And when that happens, the arguments in favor of domestic MLS will naturally disappear.
We watched the entire industry feed off Zillow until it became too powerful to ignore. Don’t do the same thing with MRED. The keys to an MLS system belong to the agents who use it every day. Please do not give it to others.
