“The MLS is an unfair monopoly” — but is it?

I posted this yesterday but it really should have gone in its own thread:


The MLS isn’t just “what sold and when.”

If you think about it, all the information is available to anybody. It’s just that the MLS stores and categorizes the information in a particularly useful way. Now, since the information is available, why should the database that categorizes the free information be free to everyone?

I don’t think it should. This is a private trade group’s search tool and publishing tool. It now works pretty well, and only after years of trial and error, input, quarterly fees, etc.

Like, if the public wants to know what sold, then OK. Let them be able to see what sold. (Even though other databases also will share this information, such as cleanoffer.) But the radius search or polygonal search — why should a trade group have to share technology?

It’s pretty weird. People don’t really get it, I think.

Or, and I hear this argument frequently too, “But you can use the MLS to view sales by districts and we can’t.”

“Districts” — districts are nomenclature created by the SFAR. In reality they are neighborhoods. Yet it’s an unfair monopoly that a private trade group categorizes free information with nomenclature it created?

I don’t see people clamoring for unlimited access to Yahoo or Google’s publishing tools, nomenclature, or statistics. Aren’t they basically the only games around these days? Isn’t that unfair?

Capitalism is unfair. And these aren’t even monopolies. The MLS is no monopoly. Cooperating assocations can access one another’s data. So can any individual who joins and pays for it. True monopolies don’t let anyone in.

I dunno. I think people just like looking at stuff on the ‘net.

It isn’t as if agents are privy to how much a particular property is going to sell for while it’s in contract very often. And that’s what people really want to know!


— Kenneth Kohlmyer a k a der fluj

17 thoughts on ““The MLS is an unfair monopoly” — but is it?

  1. First of all, I am no agent so I don’t know the innards of MLS and how its technologies work, and I am probably speaking way out of my domain expertise here, chiming in on MLS…

    But when I said it’s a monopoly, I mean MLS the site thinks it is a monopoly and acts like it, and its action with the token suggests to me they are trying to defend their business model. Perhaps monopoly is a too big of a word, and MLS is just trying to do what it can to extract as much money as possible from what it thinks it is entitled to).

    However, I believe pretty soon there will be others who will fulfill its role, with a different business model that will make the data (and additional benefits of technology such as radius search) available to the public, while making money from a different route (like VC money and then being bought out — formula for any web 2.0). That’s what I mean by “internet will roll over it.”

    In general, I don’t believe anybody has a chance by standing in the way of the megatrend that says “Information Wants To Be Free.” The trend says 1) Information will always escape out of any realm of control (just look at Obama comment on guns and the Bible at a private fund raiser), and 2) Information will march towards of the value of zero dollars (just look at the Hollywood movies on bittorrent).

  2. In places where there are a lot of vacant properties that are luring thieves and squatters (i.e. Oakland, Vallejo, Richmond and San Pablo) , it’s really important to guard the confidential info that would be in the confidential agent-only info on the MLS. The other info on the MLS is generally available in other places on the internet for people who know where to look (right?) People can even pay (like we do) for more information and my clients already come to me with properties they like complete with a history of ownership, etc.

  3. The MLS is a service owned by the real estate brokers that set it up. That’s all. It is a wholly owned entitiy and like any other entity it is entitled to do with it’s product what it wants.

    Realtors that are active in Board politicas and in emerging technologies understand the desire of new users of technology to have all data be free. The saying goes that “data wants to be free”. No, not really. Data exists, it;s just there that’s all. Who has access to it and what is done with it is at the perview of the group that gathers it.

    Today I was at Inman Connect and was speaking with DataQuick. Everyone knows them, they are quoted all the time. DataQuick gathers public information from the tax records. It contains all the sale prices, loan information, re-finanance info, ownership names etc. Public record, anyone can go to the county recorders office and get the sale price of any property anywhere. OK, so some feel that Realtors are being “in restraint of trade” or “monopolistic” in not giving the data collected away. DataQuick is willing to sell you all the sold information for the whole United States for between $400,000.00 and $500,000 dollars per year.

    They spend resources to gather and can command a half a million dollars a year to make it available to anyone that wants it. Why should the Realtors give it away?

  4. Fluj and others, the problem is that you do not understand the antitrust law principles or the claims at issue. Nobody is saying that the MLS must “give information away.” Rather, the antitrust laws prohibit conspiracies to “restrain trade.” The NAR/MLS is just a group of real estate brokers, competitors in fact, but they have prohibited their members from sharing the collective information in ways that lower costs for their customers. That is illegal, just as it would be illegal for a “trade group” of gasoline stations to agree in a “bylaw” not to sell gas for under $6 a gallon. It is simply false that when an agreement among competitors is at issue, they can “do with their product what they want.” Those brokers who want to allow their customers to search and review the collective information themselves in order to lower costs, rather than forcing the customer to have the brokers run all the searches, must be permitted to do so under the antitrust laws.

  5. “, but they have prohibited their members from sharing the collective information in ways that lower costs for their customers. ”

    If that’s the real language I don’t see how this could be proven. The information is quite simply free and available elsewhere. How is cost directly affected?

  6. And in fact, the information is also free to buyers and sellers from brokers, as is. Just ask me. I’ll tell you.

  7. Cost is directly affected because some brokers would prefer to let their customers access the data (all the data) and search it however they want, meaning that no human broker needs to be involved as a middleman to crunch or analyze the data, which would lower costs and permit lower commissions.

  8. People can already get that information, number one. Two, positing that 5% or so commissions is only a direct result of the MLS would be tough to prove in court I would think.

  9. By that logic also one could argue that if a buyer is hypothetically interested in a property for sale that is next door to a similar property which in contract and not yet sold, the perspective buyer should be entitled to know what the neighboring property’s contingent price is. Price is potentially affected by the lack of disclosure, right? Well, sure it is. But it’s not a done deal and there are a million reasons for such proceedings to remain private.

  10. Fluj, you’ve got it all wrong. First, under the antitrust laws you don’t need to prove that the concerted action in restraint of trade directly caused the 5% commission. The point is that the NAR/MLS prohibits members from providing information in a way that would lower their costs. Second, your hypothetical has nothing at all to do with the antitrust issues. Those arise out of the agreement among competitors to prohibit members from sharing the information with their customers as they would like to do. This has nothing to do with any “perspective” (sic) buyer being “entitled” to anything.

    Go read the Department of Justice lawsuit filings. It is not that complicated, but you should hold off on commenting until you know what the legal and factual issues are.

  11. Can someone tell me what’s the best way to access the MLS for East Bay properties? San Francisco MLS is a great site but I can’t find a public one to use for the East Bay. Thanks in advanced.

  12. “The point is that the NAR/MLS prohibits members from providing information in a way that would lower their costs.”

    I understand this, your main point, and I do not see how it could be proven. A court would need to put a fine point on commissions versus sales prices and assign relative values to agency versus information.

    And again, the information is already freely obtainable.

  13. Hey anon,

    I’m an atty too and I don’t think you’re making accurate comparisons. NAR/MLS is nothing like oil companies colluding to raise oil prices. If you wanna know how much your bought his house for, you can look it up in the assessor/recorder’s office.

    It’s more similar to a phone book. If you’ll recall the Supreme Court of the US said that the raw info in a phone book is fair game because it was public information freely available through other channels. But the format of publication and manner in which the information was gathered are protected as trade secrets, copyrighted info and etc.

    While it would be nice to have full access to the MLS, I understand fluj’s and the NAR’s point. Also, just because some idiot files a law suit, that doesn’t give his claims merits. It just means he can meet the burden of pleading, which we both know is a VERY LOW standard.

  14. BB-Smurf, this wasn’t just some idiot filing a lawsuit. It was the U.S. Department of Justice. And they obtained a settlement. I agree the conspiring oil companies was not an exact analogy. The point I was making is that anytime you have an agreement among competitors, like the NAR/MLS, the rules are quite different because of the inherent anticompetitive risks in such agreements. So the phone book data compiled by the single phone company really is not the same thing. Here, the NAR had rules pretty obviously designed to prevent its members from using the joint data in more efficient ways so they could all retain monopoly power. It does not matter that the same data could theoretically be compiled somewhere else.

  15. Someone above asked about the East Bay MLS…I agree, it’s much easier for the public to directly access the SF MLS. Many of my clients access East Bay MLS info on third-party websites like realtor.com, movoto.com, and redfin.com. Whatever they use, they can often find the same properties as I can although they are not privy to the confidential remarks, sold info or data manipulation functions members of the ebrdi have. Also, if you like, you can search through my website, I won’t bug you if you just want to search the MLS.

  16. MLS is a bit of a monopoly b/c they are by far the most used. The competitors are tiny by comparison of usage; the new sell by owner websites are about the only thing close to making a dent.

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