As giant, publicly-traded real estate firms grow in power, some fear they could become rivals to the MLS sites which enable a fair and open residential real estate market.

An influential group of multiple listings service operators from around the country warn “the multiple listing service as we know it is in jeopardy,” but many Massachusetts real estate agents aren’t so sure. 

A recent white paper from members of the MLS Roundtable paints a bleak picture of the current state of the MLS system nationwide. It faces challenges from third party vendors like Zillow and Realtor.com and a lack of investment in up-to-date, user-friendly software. These difficulties, the Roundtable report warned, could lead real estate agents to ditch the services which form the backbone of America’s residential real estate markets, creating a fragmented market with less competition and higher barriers to entry.  

This is not the first time the MLS Roundtable has raised alarms about the future of the MLS system. In its 2017 report, the Roundtable also cited technological challenges that could pose a threat to MLS.  

Five Major Challenges 

The Roundtable names five big hurdles facing MLS services: declining and incomplete for-sale inventory in the MLS databases; increasing off-MLS home marketing; large brokers marketing homes exclusively on company websites before marketing them in the MLS; expanded iBuyer services in which companies like Zillow buy, list and sell homes they own without the MLS; and the growth and consolidation of brokerages and data vendors into national entities, which provides firms with the ability to serve as listing databases. 

Despite these concerns, many in the Massachusetts real estate environment are comfortable and confident with their largest local listing service, MLS PIN.  

“MLS is a great system,” said Anthony Lamacchia, owner of Lamacchia Realty Inc. “Other systems feed off it. Without MLS, we won’t be able to do what we do.” 

Some, like Cape Cod & Islands Association of Realtors CEO Ryan Castle, don’t view sites like Zillow as a threat. According to Castle, Zillow and similar companies are just another avenue where realtors can advertise their client’s property. 

Melvin Vieira, real estate consultant at the Vieira Group/REMAX Destiny, said the volume of information agents upload to MLS services help insulate them from Zillow and other sites under their current model. 

“Without MLS nothing else can really exist,” Vieira said. “It doesn’t matter how a buyer hears of an open house, whether it’s Boston.com, social media, etc. The internet has been a boom for the real estate market and these sites just help get the word out.” 

Calls for Better User Interface 

That doesn’t mean using MLS PIN isn’t without its challenges.  

According to Meg Steere, a sales associate at Berkshire Hathaway Home Services Commonwealth Real Estate, sites like Zillow and Redfin have features that she’d like to see be incorporated into MLS PIN.  

“I’m on MLS every day, and it plays a vital role in what I’m doing on a daily basis, but there are definitely pieces where MLS is just not keeping up,” Steere said.  

Steere said that she occasionally looks at the Zillow website to see what customers are seeing with “Zestimates” – Zillow’s algorithm-based estimate of a home’s value – or school information for local communities. Steere is also not a fan of how MLSes and Zillow interact. 

Experienced industry figures say they aren’t concerned about warnings contained in a report from the MLS Roundtable that the country’s system of real estate listings services is under threat.

“We as agents do most of the work to get the home on the market – we’re meeting with clients, signing them up, listing to sell their home, do the photography,” Steere said. “Then, MLS feeds it to Zillow and then Zillow takes that information and sells back leads to the agents.” 

Some are skeptical that any MLS service could go toe-to-toe with a well-funded giant like Zillow, though.  

“MLS is going to be around a long time,” said Lamacchia. “We have to have one central place where everybody puts their listings. I don’t like to say this, but Zillow is so far ahead of everyone else from a consumer perspective, you just couldn’t compete.” 

MLS PIN Goes Mobile-Friendly 

MLS PIN is constantly upgrading and updating services for its clients, said President and CEO Kathy Condon. 

The MLS PIN recently rolled out more mobile–friendly changes to its interface as more agents rely on their phones to access the service. Agents can now enter more photos and floor plans for their properties, too, giving prospective buyers more information on homes for sale.  

MLS systems also goes to considerable lengths to validate data in agent’s listings, said Castle, whose organization also owns the Cape Cod & Islands and Martha’s Vineyard MLSes.  

Condon, who also participated in the MLS Roundtable study, said any MLS has a trump card over other listings websites in the open, level playing field it provides to real estate agents. If a listing is only placed on Zillow, then there is no agreement to abide by the set of rules regarding compensation and cooperation that is agreed upon when a listing is submitted to MLS PIN.  

Some of the threats cited in the MLS Roundtable report already exist, like the “open door” concept, more prominent in Arizona but which has shown up locally, where a real estate company buys a property from a seller and then sells it themselves. Vieira has also heard Realtors talk about posting listings only on their websites or using selling homes via private “pocket listings” – recently banned by the National Association of Realtors – but believes a recession will reduce these behaviors. 

“There are and will be people and real estate companies that will try and control the market,” Vieira said. “But people need to know – the market is not always going to be as fast and furious as it is now. I’ve been through two recessions, and when that happens, we’re going to need to work together and share information. People can try and control the information but when the market turns, their whole attitude change. They realize they can’t sell the property on their own. They can’t touch and connect with every single seller or buyer out there.”