Above, Darryl Davis
The real estate industry is on the verge of facing significant legal challenges. While recent lawsuits have targeted commission structures and transparency, two lesser-discussed practices could be next in line for scrutiny: the National Association of REALTORS®’ (NAR) Clear Cooperation Policy and the requirement that agents must join NAR to gain access to the Multiple Listing Service (MLS).
Clear Cooperation policy: limiting how agents can compete
The Clear Cooperation Policy, adopted by NAR in 2020, requires that any property marketed to the public must also be listed on the MLS within one business day. The policy intends to level the playing field, ensuring that all agents and buyers have equal access to listings. However, it creates a rigid framework that restricts agents and limits the seller’s options.
One criticism is that the policy bans off-market or “pocket” listings, where properties are marketed privately to select buyers. While transparency is important, there are valid reasons why a seller might prefer not to advertise their home publicly. By forcing all listings into the MLS system, the Clear Cooperation Policy eliminates these options, limiting how agents can tailor their services and restricting sellers’ choices for alternative marketing strategies that might better serve their needs.
By loosening the policy’s strict requirements, NAR can still promote transparency without restricting competition.
MLS access tied to NAR membership: a monopoly by design?
Another controversial issue is the requirement that real estate agents must join NAR to access the MLS. Without access to the MLS, an agent is at a severe disadvantage. Yet, gaining access requires paying for NAR membership, which is not just an extra fee, but a potential legal liability.
Forcing agents to join an organization to access a crucial industry tool creates a monopolistic control over the marketplace. By tying the MLS to NAR membership, agents who may prefer to operate outside of NAR’s system are cut off from the MLS, which limits their ability to compete, and forces them to pay unnecessary fees to join an organization they may not align with.
Allowing agents to access the MLS without being forced to join NAR would open the market to greater competition and give agents more freedom to choose which professional organizations to affiliate with.
Adapt or face the consequences
The real estate industry stands at a pivotal moment. The Clear Cooperation Policy and the requirement for NAR membership to access the MLS are practices that, if not changed, could lead to significant antitrust lawsuits. Both policies restrict competition in ways that could violate U.S. antitrust laws, opening the door for legal challenges that could dramatically reshape how the industry operates.
For more information, visit https://darrylspeaks.com/.
